Tesla CEO Elon Musk waves as he departs from the Tesla Gig factory for electric cars in Gruen Heide near Berlin, Germany on March 13, 2024. Tesla shareholders are determining the future of the electric vehicle company as they conclude voting on whether to reinstate Musk’s substantial pay package, which had been invalidated by a Delaware judge. Credit: AP Photo/Ebrahim Noroozi, File
Despite the median U.S. CEO pay package last year being nearly 200 times higher than that of a mid-level company worker, Elon Musk’s record-breaking Tesla compensation eclipses them all. Tesla shareholders voted overwhelmingly on Thursday to reinstate Musk’s 10-year pay plan, initially valued at $44.9 billion in April, though its worth has decreased due to Tesla’s stock dropping approximately 25% since then.
The all-stock package, endorsed by the board and shareholders in 2018, incentivizes Musk to achieve milestones such as enhancing Tesla’s market value, pretax income, and revenue. Initially invalidated by a Delaware judge in January citing procedural flaws and inadequate shareholder disclosure, the compensation was defended by Tesla, arguing Musk’s pivotal role in transforming Tesla into the leading electric vehicle manufacturer globally, significantly boosting its market value.
Despite the reapproval vote, Musk’s access to the stock options remains pending. Tesla is likely to petition the judge to reconsider in light of the vote, with a potential appeal to Delaware’s Supreme Court if needed, a process that could span months.
Irrespective of the final legal outcome, Musk’s package—by far the largest awarded to a CEO of a U.S. public company—dwarfs those granted to other chief executives. Here’s how it compares:
Elon Musk attends the 10th Breakthrough Prize Ceremony at the Academy Museum of Motion Pictures in Los Angeles on April 13, 2024. Tesla shareholders are deciding the future of the electric vehicle company as they conclude voting on whether to reinstate Tesla CEO Musk’s massive pay package, which was invalidated by a Delaware judge. Credit: Photo by Jordan Strauss/IN vision/AP, File
Comparisons
With Median CEO Pay The median pay package for an S&P 500 U.S. CEO last year was $16.3 million, according to Equilar data analyzed for The Associated Press. Musk’s potential earnings over a decade would still be 275 times greater, even at a conservative estimate of $163 million.
With Individual CEOs Hock Tan, CEO of Broadcom Inc., topped the AP’s survey with a package initially valued at $162 million in fiscal 2023, later increased to $767.7 million due to a soaring stock price. Yet, this pales in comparison to Musk’s potential windfall of nearly $45 billion from 304 million shares.
Other top CEOs in the AP survey include William Lansing of Fair Isaac Corp ($66.3 million), Tim Cook of Apple Inc. ($63.2 million), Hamid Moghadam of Prologis Inc. ($50.9 million), and Ted Sarandos, co-CEO of Netflix ($49.8 million).
Musk technically received no compensation last year due to no stock options. However, should his pay package prevail, his earnings could ascend into the billions, far exceeding the median annual pay of non-CEO Tesla employees, reported at $45,811 in the company’s proxy filing this year.
