Here’s how Elon Musk’s $45 billion Tesla paycheck compares to that of the CEOs of Apple and Netflix
Even though the pay package of the average American CEO last year was almost 200 times that of the average employee of their company, Elon Musk’s compensation for recording Tesla is small in comparison.
Tesla shareholders on Thursday voted overwhelmingly in favor of reinstating Musk’s 10-year payout plan, which the company named in April at $44.9 billion. It was worth a lot at the beginning of the year, but Tesla’s stock price has fallen about 25% since then.
The all-stock package, approved by the board and shareholders in 2018, rewards Musk for hitting milestones that include increasing Tesla’s market value, pretax income and revenue.
It was thrown out by a Delaware judge in January who said the approval process was “seriously flawed.” The court ruled that Musk controlled the company’s board, and that shareholders had not been fully informed.
But the company said Musk deserves a payout because he turned Tesla into the world’s best-selling electric car maker, increasing its market value by billions.
Even with a re-approval vote, Musk won’t have access to stock options yet. Tesla is expected to ask a judge to reconsider its decision because of the vote, and if he doesn’t, the company will likely appeal the decision to the Delaware Supreme Court. This whole process can take months.
Whatever the outcome, Musk’s package — the largest award for a US public company CEO — is far more than what other CEOs have been given. Here’s how the package compares:
For average CEO pay
The average pay package of the S&P 500 CEO last year was $16.3 million, according to data analyzed by the Associated Press by Equilar. If you multiply that by 10 to get $163 million over ten years of work, Musk’s salary is still 275 times greater.
In her January decision that disrupted the package, Delaware Chancellor Kathaleen St. Jude McCormick wrote that Musk’s package, at the time worth about $56 billion, was 250 times larger than the average peer’s pay plan.
By individual CEOs
The top earner in the AP survey was Hock Tan, CEO of artificial intelligence company Broadcom Inc. His package, which mainly includes stock awards, was worth an estimated $162 million, when it was awarded to Tan at the start of the 2023 financial year. Thanks to a big increase in the stock price, Broadcom in March valued Tan’s pay package, plus the old options he had not yet cashed in, at $767.7 million. That’s an amount easily eclipsed by Musk’s haul of 304 million shares worth about $45 billion.
Other top CEOs in the AP survey are 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, CEO of Netflix ($49.8 million).
Technically, Musk did not receive compensation last year because he did not receive any stock options. But he will be even richer if his paycheck goes through.
And Tesla employees
It’s hard to calculate what Musk’s annual salary would have been last year. The company says it found nothing. But if his compensation package goes through the courts, his payout will be in the billions. According to a company representative who filed this year, the median annual salary for a non-executive at Tesla last year was $45,811.
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