It’s safe to say that the year 2020 has been unkind to most of us. Well, except for two notable billionaires: Amazon CEO Jeff Bezos and Tesla CEO Elon Musk.
The latter has been having one of the best years yet in terms of meeting his business goals with his automaker company. It looks like not even a global pandemic and the United States entering a recession can stop Musk from adding billions to his net worth and growing Tesla at fast rates.
Elon’s Soaring Net Worth
While his fellow billionaires have been struggling to keep their companies afloat during these challenging times, the 49-year-old saw his net worth increase from $27.5 billion at the beginning of the year to around $68.3 billion.
Breaking down his current wealth, the majority of it is tied to his stakes in Tesla. Musk reportedly owns about 22% of the electric car manufacturer.
While he also has a sizable stake in the aerospace manufacturer SpaceX, his shares in it don’t affect his net worth much as the company is privately owned.
On the other hand, Tesla, being a publicly-traded company, is subject to the volatility of the stock market.
Unique Compensation Plan
Another interesting thing is that Musk doesn’t get a salary from being Tesla’s CEO at all. Instead, he gets compensation from the company when he reaches certain goals as agreed upon by him and Tesla’s board.
Signed in 2018, the compensation package entails that Musk is awarded 1.69 million new shares in the company every time he manages to add $50 billion to Tesla’s market capitalization and maintains the increase for at least half a year. The plan has 12 levels and ends when Musk has reached $650 billion.
Should he choose to keep all of the stocks he would be awarded, Musk’s shares would be worth a whopping $100 billion.
Win after Win
Tesla’s was valued at $50 billion when the compensation package was put into effect.
Just recently, the automaker’s valuation topped $300 billion. This meant that Musk got to access the second tranche of his 12-level compensation plan.
His second payday meant him getting 1.69 million shares currently valued at $2.7 billion. This comes just about two months after he unlocked the first tranche of the plan in May when Tesla’s market capitalization stayed north of $100 billion for six months.
Musk’s first payday was valued at $700 million.
