Elon Musk’s $416 million-a-day Tesla deal could make him world’s first trillionaire if targets are met
Tesla shareholders approved Elon Musk’s pay package — potentially the largest in history — even though the divisive billionaire’s outspoken political views have hurt sales of its iconic electric cars.
Mr Musk could earn an equivalent of $US270 million ($416 million) per day in stock, every day, for the next 10 years if Tesla hits Mr Musk’s ambitious operating and share price targets.
To reach this daily payday, Mr Musk needs to get Tesla’s market valuation to $US8.5 trillion in 10 years, which would earn him a maximum payout of 423.8 million shares in 12 separate target-based tranches.
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By continuing you agree to our Terms and Privacy Policy.If Tesla’s valuation reaches $US8.5 trillion, each share would be worth around $US2639 per share based on 3.22 billion undiluted shares on issue today, or around $US2328 per share, after adjusting for the dilution from Mr Musk earning 423.3 million shares over the period.
That means Mr Musk’s share award in 10 years’ time could be worth $US985 billion, or close to the $US1 trillion figure quoted in media reports. Dividing that by 3650 days reaches an amount of $US270 million a day, or $US2.9 billion a week, although it should be noted these figures are estimates and multiple inputs like future share counts are subject to unknown variables.
High valuation
The pay package — under the stewardship of his Australian chairwoman, Robyn Denholm — is highly controversial.
Tesla shareholders were left to choose between supporting Mr Musk or voting against a founder responsible for promoting the stock and their financial interests.
It is unclear if Tesla’s full self-driving technology is good enough to work as a taxi service, without the need for a safety driver. Elsewhere, Mr Musk has made questionable claims he can build tens of millions of Optimus robots powered by artificial intelligence for unspecified purposes, as part of Tesla’s next growth leg.
Some analysts think the electric vehicle maker’s already sky-high valuation of $US1.43 trillion is driven by the US Federal Reserve’s pandemic-era money printing of trillions of dollars.
In the September quarter, the electric vehicle maker’s profits tumbled 37 per cent to $US1.3 billion on earnings of just 50 US cents per share, versus a $US444 stock price.
