EXPLAINER: How much does Tesla CEO Elon Musk get paid? And why? – Business Insider

EXPLAINER: How much does Tesla CEO Elon Musk get paid? And why? – Business Insider

Elon Musk
How much a corporation's chief executive makes in a single year seems like a simple question, but specifying what top executives truly make (and when) is a surprisingly difficult task. A recent report in The New York Times indicated that Elon Musk made $2.3 billion in 2018 as CEO of Tesla, but the situation is more complicated. Unless the electric-car maker achieves some truly stunning goals, Musk may not personally benefit from the massive award. The key to the discrepancy comes from the pay being calculated in accordance with the Securities and Exchange Commission's rules for reporting CEO compensation, as opposed to what top executives actually gain in a particular year. Many CEOs receive most of their compensation in the form of shares or stock options to buy shares at a given price and time. Often, those stock or option grants don't vest or become available to the chief executive until some amount of time has passed. Or, as in Tesla's case, some set of performance goals are met. That makes measuring exactly how much a given CEO makes in a given year surprisingly hard to quantify. Getting technical about executive compensation The Times published a ranking of compensation for ....

Musk's reported compensation was more than 17 times that of the next-highest executive on the list, Discovery Communications CEO David Zaslav. However, after Business Insider highlighted Musk's eye-popping compensation, Tesla reached out to us through a spokesperson and disputed this characterization. Here's Tesla's statement: Elon actually earned $0 in total compensation from Tesla in 2018, and any reporting otherwise is incorrect and misleading. Unlike other CEOs, Elon receives no salary, no cash bonuses, and no equity that simply vests by the passage of time. His only compensation is a completely at-risk performance award that was specifically designed with ambitious milestones, such as doubling Tesla's current market capitalization from approximately $40 billion to $100 billion. As a result, Elon's entire compensation is directly tied to the long-term success of Tesla and its shareholders, and none of the equity from his 2018 performance package has vested. According to the proxy statement, under the terms of the company's 2018 compensation plan for Musk, the CEO would receive a "10-year maximum term stock option to purchase 20, 264, 042 shares of Tesla's common stock, divided equally among 12 separate tranches that are each equivalent to 1% of the issued and outstanding shares of Tesla's ....

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