Elon Musk Now So Cash Poor He Needs To Take A Salary From Tesla?
Most of Elon Musk's assets are nonliquid; thus, the billionaire may take a salary from Tesla this year. Simultaneously, Tesla's board of directors is exploring a new benefits package for Musk in order to secure his long-term commitment to the company.
As absurd as it may sound that Elon Musk could empty out his pockets and there would only be lint fluttering out of them is somewhat of an accurate statement. How could the man who is ranked by Forbes as the 2nd richest man on the planet not have any cash? For the last 4 years, Musk has not taken a cash salary for being the CEO of Tesla in fact the last year he was paid a salary for the company was in 2019 and that was only $23,760.
Since 2012 Elon has been paid mostly in Tesla stock options with the amount being determined by the company’s performance under his watch. For example, his 2012 options expired last year after he earned 9 out of the 10 potential blocks. Don’t get too concerned about poor Elon Musk and whether he will be able to keep the heat on in his home, he is doing just fine. According to CNN Business, “Musk has a net worth of about $198 billion, enough money to once again grossly overpay for Twitter if he’s so inclined.”
And the better Tesla does under his leadership, the more he is worth, as he currently holds 412 million shares in the company. Those shares are currently trading at $200.86 per share. If he wanted to sell all of his shares this morning, by noon he could have $82,754,320,000 billion in his savings account. He also holds options to purchase another 304 million shares for a discounted price of $23.34 per share.
That’s right if he was so inclined, he could spend $7,095,360,000 billion this morning and the second that transaction has been completed the value of those shares would be $61,061,440,000 billion. That is a staggering amount of money that could be earned in an instant, and most of us can’t even fathom a payday like that. But that does not change the fact that Elon Musk might not be able to spring for a taxi or buy something at a convenience store because the valuation of his net worth is mostly in nonliquid assets like stocks, bonds, asset investments, Twitter, and various other endeavors.
The main concern for Tesla investors is how long will Elon Musk stay as the CEO of the Tesla Empire when with his staggering net worth, he could walk away from it at any moment. The board of directors is currently looking into offering him a new package and they are hoping to get something long-term on paper. That will help investors feel confident that Elon is committed to the long haul and prioritizing Tesla at the front of his many interests.
Tesla has an investors meeting scheduled for March 1st where they will be releasing their proxy statements and investors are hoping the board will also announce its plans for a new compensation package for Elon. And at last year’s investor meeting when ask Elon Musk stated, “I intend to stay with Tesla as long as I can be useful.” If a new long-term agreement is made with Musk will go a long way in bolstering Tesla’s stock price as everyone knows he is the driving force for Tesla’s stock success and if he is not retained in that role it would be detrimental to the company’s value.
