11 billion dollars! This is the salary of musk last year, which ranked first among the world’s major CEOs


According to Tencent technology news on May 7, the name of Elon Musk may not be found in all kinds of top paid CEOs in 2020. But according to Forbes magazine, he is actually the highest paid CEO of all.
According to Forbes estimates, Musk’s salary last year was about $11 billion, all of which was granted by Tesla as part of a compensation plan he signed with the electric car manufacturer in 2018. The plan, initially worth about $2.3 billion, was implemented in 10 years, but it didn’t take effect until 2020.
The option awards detailed in the 2018 compensation plan require Tesla to reach various milestones such as market capitalization, revenue or EBITDA (earnings before interest, tax, depreciation and amortization). All in all, the compensation package gives musk the right to buy a total of 101.2 million Tesla shares for $70 per share. The compensation package is divided into 12 parts, and specific parts can only be unlocked when Tesla reaches certain milestones.
Market value milestones are based on the monthly average of past performance, starting from US $100 billion and then increasing by US $50 billion. However, Tesla unexpectedly broke these milestones and its market value will rise to more than US $650 billion by the end of 2020. In addition, each quarter must meet a financial target, revenue or adjusted EBITDA growth. By the end of 2020, Tesla has achieved four of its goals, with annual revenue reaching $20 billion and adjusted EBITDA growing from less than $1.5 billion to $4.5 billion.
The first four batches of musk option awards have been granted in 2020, when Tesla reached various market capitalization and revenue milestones, and its stock rose sevenfold, greatly enhancing Musk’s wealth. The chief executive of Tesla is now the third richest man on earth. As of May 5, 2021, his net assets are estimated to be $165.7 billion, which is a huge jump compared with $24.6 billion in mid March 2020.
Each award gives musk the right to buy 8.4 million Tesla shares. According to Forbes, the Tesla CEO will receive an option award worth $13.3 billion in 2020. In order to exercise the power, musk will spend about $2.36 billion《 Forbes’ calculations show that, after deducting these costs, the options added $11 billion to Musk’s wealth.
That makes Musk’s annual salary much higher than paycom’s chief executive, Chad richson, who topped the 2020 earnings list with a salary of $211 million.
However, according to the filing, musk must hold the newly granted Tesla shares for five years. As a result, although he has the right to exercise a total of 33.77 million options from the 2020 award, he cannot sell these shares immediately. Although this may be one of the reasons why he didn’t appear on the list of the highest paid CEOs, experts also pointed out that most of the analysis of executive compensation focuses on the date when the option award is granted, rather than when it is exercised.
Much depends on how companies are required to disclose executive compensation to the securities and Exchange Commission. Janice koors, senior managing director of Pearl Meyer, a compensation consultancy, explained: “most of the top paid CEOs are compiled directly from the salary summary in the company’s annual report.”
However, stock awards such as options are only disclosed in the year in which they are granted. “As a result, when a company issues what we call ‘massive grants’ covering many years, there are peaks and troughs in the information disclosed: the year of grant will show a large number in the pay summary, and it will not appear in the pay summary in the next few years,” kurs said
Forbes analyzed the documents submitted by Tesla and used the date of grant to value different parts of the options granted to musk in 2020, namely May 28, July 24, September 30 and December 31, 2020.
Since the beginning of 2021, Tesla has been setting new milestones, especially after the first quarter results exceeded market expectations. Musk won the other two parts of the 2018 CEO performance award, which will give him the right to exercise another 16.9 million options. So far, musk has obtained about 50.6 million shares of six batches of options. At current share prices, it is worth about $33.9 billion. At today’s share price, the total value of all 101.2 million options is about $67.9 billion( Tencent technology reviser / Jinlu)