Just awarded $ 11 billion in 2020, Elon Musk plans to receive another tens of billion this year

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2021-05-07 13:54:01

Elon Musk is not the name appearing in the list of CEOs (CEO) highest-paid businesses in the US in 2020. However, according to calculations by Forbes magazine, CEO Tesla is the payee. highest bonus last year.

Forbes said Musk had received about $ 11 billion in Tesla stock options last year, as part of a massive bonus package for him approved by the Tesla board of directors in 2018.

Under this bonus package, Musk will receive a certain amount of Tesla stock when the electric car company meets the capitalization and revenue milestones or EBITDA – pre-interest income, taxes and amortization.

This option allows Musk to buy a total of 101.2 million Tesla shares at a price of just $ 70 per share. Meanwhile, Tesla’s stock price is currently trading at nearly $ 670 per share.

The above bonus package is divided into 12 phases, corresponding to each capitalization milestone and revenue / profit achieved.

In 2020, Musk was able to open four bonus packages under this package, as Tesla capitalization continuously set new records, while business operations also hit impressive milestones. Last year, Tesla’s stock price rose 700%, helping Musk’s fortune skyrocketing. At one point, Musk overtook Jeff Bezos as the richest man in the world.

Currently, the Tesla CEO is the third richest person in the world with a net worth of $ 165.7 billion, as of May 5, 2021 – almost seven times more than $ 24.6 billion in mid-March 2020.

Musk’s bonus package capitalization milestones are based on the average monthly cap, starting at $ 100 billion and increasing by $ 50 billion each subsequent. However, the sharp rise in stock prices over the past time helped Tesla far exceed these milestones, closing in 2020 with a market capitalization of more than $ 650 billion. In terms of business, Tesla also hit four milestones with annual sales of $ 20 billion by 2020, while EBITDA increased from under $ 1.5 billion to $ 4.5 billion.

For each milestone, Musk has an option to buy 8.4 million Tesla shares. Last year, Tesla CEO received a total of $ 13.3 billion stock options, according to Forbes’ calculations. To exercise these options, Musk spent about $ 2.36 billion. Therefore, he “pocketed” 11 billion USD when exercising the option to buy this stock.

This figure far exceeds the bonus salary of 211 million USD by Chad Richison, CEO of Paycom – the head of the list of highest salary CEOs in 2020.

However, under the terms of the bonus package, Musk is required to keep the number of shares purchased under the bonus option for five years. Therefore, although he has the option to buy 33.77 million shares received in 2020, he cannot immediately sell. According to Forbes, this is the reason he did not appear in the list of CEOs with the highest salary last year.

From the beginning of this year, Tesla continued to roll new capitalization milestones and recorded impressive quarterly business results. Accordingly, Musk opened two more bonus rounds with a total of 16.9 million stock options. Meanwhile, with 6 previous times, he received the option to buy nearly 50.6 million shares (equivalent to 33.9 billion USD at current share price).

The package value for Musk 101.2 million shares is worth about $ 67.9 billion at current stock prices. Given the business situation and the strong uptrend of Tesla shares, Elon Musk is expected to receive tens of billions of dollars more this year.

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