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Elon Musk is about to get richer

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Elon Musk is about to get richer
WASHINGTON DC, USA - MARCH 9: Elon Musk, Founder and Chief Engineer of SpaceX, speaks during the Satellite 2020 Conference in Washington, DC, United States on March 9, 2020. (Photo by Yasin Ozturk/Anadolu Agency via Getty Images)

As a CEO, Elon Musk receives no salary, but his 2020 paycheck reached sky-high level.

Elon Musk received four grants to buy 8.4 million Tesla shares in 2020. After paying the exercise price, those blocks of stock options were each worth $6.2 billion consequently at Wednesday’s closing price. The combined value of these four grants alone worth $24.8 billion. These options alone were more than Musk’s worth a year ago-31st richest person according to the calculation of Forbes in its billionaire list.

The year 2021 and 2022 could be even more profitable for him.

The company’s annual financial filing this week disclosed that Musk will be likely to receive three additional option grants this year. Not only that, these option grants will be as lucrative as those he received in 2020.

 

Tesla

Analysts are currently forecasting that Tesla’s 2022 financial results will reach heights that would bring Musk three additional blocks of options. Tesla could hit one of those profit targets, which means Musk could match the four tranches of options he received last year.

elon musk

The stock of Tesla has a rise of 743% and made into the market’s biggest winner. At the same time, Tesla is also one of the most valuable companies in the world.

According to Bloomberg, the rise in Tesla’s stock price, as well as his options to buy new shares, cause Musk to be the world’s richest man. This is because Musk owns 170 million Tesla shares outright, which worth about $137.2 billion. Elon Musk has options to buy new shares in addition to those existing ones. In fact, the nearly $123 billion gained in 2020 of the share values of Musk already own dwarfs the value of the additional options he received.

The increase in Tesla’s share price at the same time will also cause an increment in the value of the options. In late May when Tesla confirmed Musk received the first block of options for 2020, they were “only” valued at $ 770 million. However, the price today worth $6.2 billion.

Musk has not exercised any of his options. He never sold Tesla shares.

 

Cost to Tesla of the options

Besides, Tesla makes stock widely available to its employee. When Musk was asked why isn’t the company matching the employees’ contribution to the 401(k) plans, he responded, “Everyone at Tesla receives stock. My comp is all stock/options, which I do not take off the table. That’s what you’re missing.”

 

 

 

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Elon Musk, the world’s richest man, is about to get a whole lot richer

 

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