What is he worth to Tesla?
A court rejected Musk’s $55.8b pay package
EVEN when compared with other CEOs, who routinely get paid roughly 200 times more than their typical employees, Elon Musk’s pay package was eye-opening.
A judge in Delaware on Tuesday struck down the package that Tesla established for Musk in 2018, ruling that the process was “flawed” and the price “unfair.” Chancellor Kathaleen St Jude McCormick called the package “the largest potential compensation opportunity ever observed in public markets by multiple orders of magnitude.”
So, if Musk isn’t worth the maximum $55.8 billion value of the package, how much is he worth? It’s a thorny question without an easy answer in the notoriously complex world of executive compensation.
McCormick’s ruling bumped Musk out of the top spot on the Forbes list of wealthiest people. The magazine on Wednesday lopped $25 billion off his net worth, reducing it to $185.3 billion, putting him behind fashion and cosmetics magnate Bernard Arnault and family.
Critics have argued for years that CEO pay packages are exorbitant. The median compensation for a CEO of an S&P 500 company was valued at $14.8million, according to the latest AP CEO pay survey for 2022 conducted with the executive compensation research firm Equilar.
It would take the typical worker at one of those companies more than 185 years to earn what their chief executive reaped in just 12 months.
In 2018, Tesla estimated the value of Musk’s compensation package at $2.28billion, topping the previous highest package of $1.39billion given to Blackstone’s Steven Schwarzman 10 years earlier, according to Equilar.
The value of Musk’s package has grown as Tesla’s stock price increased. By comparison, in 2022 the median worker at Tesla made $34,084.