NewsElon Musk
Jun 17, 2024 07:57 AM EDT
Even though the median U.S. CEO's pay package from the previous year was about 200 times more than that of an employee in the middle of their company's pay range, Elon Musk's record-breaking Tesla salary pales in comparison.
The majority of Tesla shareholders voted on Thursday to restore Musk's ten-year pay plan, which was estimated to be worth $44.9 billion in April. Tesla's stock was worth more early in the year, but since then, its value has decreased by almost 25%.
In 2018, the board and shareholders adopted an all-stock package that rewarded Musk for reaching many benchmarks, including increasing Tesla's revenue, pretax profits, and market value.
A Delaware judge had rejected it in January, citing "deeply flawed" approval procedures and the fact that Musk controlled the board of the firm and that shareholders were not properly notified.
However, the business argued that Musk should be compensated because he made Tesla the most popular electric car manufacturer globally and raised its market capitalization by billions of dollars.
Musk cannot yet access the stock options, even with the reapproval vote. In light of the vote, Tesla is anticipated to request that the judge reexamine her judgment. Should she decline, the firm is most likely to file an appeal with Delaware's Supreme Court. Months might pass during the entire procedure.
Regardless of the result, Musk will receive a considerably larger sum than previous CEOs, making it the highest payout ever given to a CEO of a publicly traded firm in the United States.
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The average compensation package of an S&P 500 U.S. CEO or the previous year was $16.3 million, based on statistics that Equilar examined for The Associated Press. Musk would still have made 275 times more money even if you were to increase it by ten to reach $163 million for ten years of labor.
Delaware Chancellor Kathaleen St. Jude McCormick stated that Musk's package, which was then valued at around $56 billion, was 250 times more than the median peer CEO's compensation plan in her opinion from January, which invalidated the deal.
Hock Tan, CEO of Broadcom Inc., an artificial intelligence company, was the highest paid respondent in the AP survey. At the beginning of fiscal 2023, his remuneration package-which mostly consisted of stock awards-was estimated to be worth around $162 million. Due to a surging stock price, Broadcom in March valued Tan's pay package, along with older options he hadn't yet cashed in, at $767.7 million. This amount is significantly surpassed by Elon Musk's potential haul of 304 million shares, worth almost $45 billion.
Other CEOs at the top of AP's survey include William Lansing of Fair Isaac Corp, with $66.3 million; Tim Cook of Apple Inc., with $63.2 million; Hamid Moghadam of Prologis Inc., with $50.9 million; and Ted Sarandos, co-CEO of Netflix, with $49.8 million.
Technically, Musk received no compensation last year as he didn't get any stock options. However, he stands to become even wealthier if his pay package is approved.
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