- Elon Musk doesn’t draw a cash salary from Tesla because he’s paid in stock options.
- He received the final block of options from his 2018 pay package last month, meaning he’s now technically working for free.
- But don’t feel too sorry for Musk – he made $56 billion from the 2018 plan.
Tesla CEO Elon Musk is currently working for free.
The world’s second-richest person hasn’t taken a cash salary since 2019 – when he was paid just $23,760 to comply with the minimum wage laws in California.
Instead, Musk agreed deals in 2012 and 2018 to be paid in stock options, which give him the right to load up on Tesla shares at a below-market price.
But the 2012 options deal expired last year, and Tesla confirmed in last month’s fourth-quarter earnings report that Musk had received the final block of options that he had agreed to take as part of his 2018 pay package.
So without a cash salary or stock options, Musk isn’t being paid to be Tesla’s CEO right now – but don’t feel too sorry for him.
The 2018 compensation package paid him around $56 billion worth of Tesla stock, which is the subject of an ongoing trial originating from a lawsuit filed by individual shareholder Richard Tornetta.
Lawyers for Musk said in October that Tesla paid him billions of dollars worth of Tesla shares because he’s not a “typical CEO” and his role is closely tied to the performance of the company’s stock.
“The 2018 plan was designed with Musk in mind,” they aid in a pretrial brief. “The Plan designed and approved by the Board was not a typical pay package intended to compensate the ordinary executive for overseeing the day-to-day operations of a mature company.”
“That is because Musk is not the typical CEO.”
Musk also still derives most of his $198 billion fortune from Tesla.
He held 424 million shares in the company as of December, which would be valued at nearly $84 billion as of Tuesday’s closing bell, when Tesla’s stock traded at just over $197.
Read more: Elon Musk’s lawyers are making closing arguments in a trial over his $56 billion pay package that could be decided as soon as today