They work. It promotes reporting without even being a thing so I can imagine it will have a great impact when they are introduced, but I'd like to add some higher up ones just to keep the incentive alive. Even, ones that seem impossible to reach right now.
This can be risky, and can be exploited for whatever reason and can create more spam instead of reducing it.
Someone could create 50 accounts with bots and report messages to increase their number to get the reward.
Someone already paid more on some campaign for "more merit than the rank" for the green trust, and this could be the case since it give "more visibility" to the account.