Many research organizations structure the positions of senior recruits this way. For instance, senior researchers at MSR are given this leeway.

However, the outcomes are not what one would hope. Although demos are held quarterly or semi-annually to give then idea of progress, it does not take long for an organization to develop which is more focused on its own survival than that of accomplishing its promoted goal.

Reminds me a bit of the Australian island caretaker "best job in the world," (http://www.islandreefjob.com/) and a bit of the Netflix Prize.

Interesting concept. I'd love to see some company offer it just to see what the applicants come up with.