Is Elon Musk worth his £44bn Tesla pay package?

Elon Musk might, once again, get his own way.

His Tesla pay deal – worth up to $56bn (£44bn) depending on the firm’s share price – which has now been backed by shareholders is 75% of the entire spending for schools in England in 2024-5 (£60bn) and around a quarter of the budget for the NHS (£192bn).

To his many admirers, Mr Musk is worth every single cent which comes his way.

His businesses include Tesla, SpaceX, X (formerly Twitter), Starlink, Neuralink and, his latest AI project.

You could argue Tesla opened up the US market for electric vehicles, SpaceX has just sent the world’s most powerful rocket into space, and a man who volunteered to be the first human to be implanted with a Neuralink microchip into his brain can now control a computer using his thoughts.

Today, the $56bn question is: would this portfolio have been as successful without him?

Tesla’s growth

You could say Mr Musk’s pay deal was really about getting him to stay put at Tesla.

Prior to 2018, when it was agreed by the company’s board, there had been speculation about his future at the electric car maker.

The deal was structured in such a way that if Mr Musk didn’t hit certain milestones – such as Tesla’s market value, sales and underlying profit – he wouldn’t get paid at all.

Though, at that stage, he was hardly digging down the back of the sofa for loose change given he was worth nearly $20bn, according to Forbes magazine’s rich list of 2018.

But if he did hit certain goals, the potential payday was astronomical.

In fairness, Mr Musk has achieved the targets laid out for him. For example, Tesla’s market value had grown from $54bn to the $650bn goal set out in the original deal.

It has since slid back down to $570bn.

Musk’s profile

When Tesla wobbled in 2022, it was said to be because Mr Musk had taken his eye off the ball to concentrate on X – so it was his absence rather than his presence which caused a problem.

Yet his profile clearly adds massive value to these firms.

Mr Musk doesn’t believe in communications teams, preferring instead to broadcast prolifically to his 187m followers directly on his social network.

Leave a Reply


Your email address will not be published. Required fields are marked *