Elon Musk negotiated a controversial pay package in 2018 (pdf). The CEO of Tesla has agreed not to receive any salary or bonuses in exchange for a purely performance-based compensation plan. Whenever Tesla’s market capitalization crossed a milestone, from $ 100 billion, Musk would receive Tesla’s stock options to a $ 650 billion market capitalization. Each payday would be worth hundreds of millions – or even billions – depending on the fate of the stock.
At the time, observers doubted that the $ 54 billion Musk electric carmaker could enrich as much as the pay package intended. This doubt is gone.
On January 7, Elon Musk surpasses Jeff Bezos as the world’s richest man with an estimated net worth of $ 185 billion, compared to just over $ 27 billion in 2020. His wealth is driven by Tesla’s meteoric share price, now valued at $ 773 billion, seven times higher than last year.
Bezos’ wealth followed Amazon’s valuation in a long steady rise, but along with the company’s share price.
Tesla, meanwhile, has risen based on its global car sales, highly popular brand, and Musk’s vision of a global energy and transportation power station. Today, the company is worth more than all nine of the world’s largest car manufacturers – together. It’s all part of Musk’s ‘secret’ master plan of 2006 to sell affordable electric vehicles, along with energy without emissions. And let’s not forget Musk’s master plan, Part Deux: ubiquitous electric vehicles, solar roofs, and safe self-driving robotic taxis.
Although the company’s finances do not necessarily support such a stratospheric valuation, Musk argued that the company’s share price is about the future. “Tesla is absurdly overvalued if it is based on the past,” Musk said. tweeted in 2017, a time when Tesla was only worth $ 37 billion. A share price represents risk-adjusted future cash flows. ‘