Tesla’s shares may be going through a rough patch due to CEO Elon Musk’s antics, but we have to believe that the man knows what he is doing. And for his exploits, the company rewards him handsomely.
Over $2 billion
According to a recent report by The New York Times, Tesla paid Musk over $2 billion in 2018. And sure, CEOs do bring in the big bucks, but last year, no one even came close to making what Musk did.
The Times study looked at CEO compensation at 200 publicly-traded organizations, and their findings revealed a $2.284 billion earning for Elon Musk, with stock options making a huge chunk of it. This is a staggering amount, considering that David Zaslav (Discovery) came in second at $129 million.
What’s even more jaw-dropping is the fact that Musk made more than the combined earnings of the next 65 CEOs on the list! That figure stood at $2.279 billion, just a little shy of Musk’s $2.284. The difference may seem little, but remember we are comparing the earnings of over sixty people to a single CEO’s. Shocking, right?
The massive disparity between Elon Musk and other CEOs forced The Times to include another dimension in their resultant pay chart. A two-dimensional rectangle illustrates Musk’s billions, while a regular bar chart illustrates the pay of all the other top executives.
What’s the reason for this huge disparity between Musk and his counterparts, you ask? The CEO has an uncommon compensation package, one that was approved early last year. The package sees Tesla award its CEO stock options if he hits certain market cap milestones in a decade.
When the package was approved in March last year, many experts agreed on its unusual nature. Troy Wolverton (Business Insider) noted that due to Musk already controlling a significant portion of the company’s stock, he already had enough incentive to boost Tesla’s market capitalization.
Despite compensating its CEO massively, 2018 wasn’t that good a year for Tesla. Whilst reporting on their CEO study, The Times also revealed that the company was unable to significantly scale up its car production. An Elon Musk tweet also prompted an investigation by the Securities and Exchange Commission, with the SEC accusing the CEO of being in contempt of court.
Elon Musk has slammed the SEC more than once, and publicly at that, claiming that he has no respect for them.
For coming at him after his funding tweet, he hit back (on Twitter obviously) calling them a broken institution. Going by how Musk feels about the federal agency, it is safe to assume that his company doesn’t have the best relationship with the SEC.
Ask him, and he’ll tell you that they have been a thorn at his side for quite a while. The SEC sued Musk for fraud in September last year, causing the company’s stock to plummet almost 14%.
Luckily, Tesla stock always seems to weather whatever storms that come its way, and the year ended with them up 4%. 2019 hasn’t been that good either, but we are all waiting for the bounce back we know is surely coming.