Anyone can be shocked to hear the annual salary of the world’s richest man, Elon Musk. According to the new filing of SpaceX, Musk gets only $ 54,080 i.e. about Rs 52 lakh annually. Despite this, his net worth has exceeded 800 billion dollars. The question is, how did a person taking such a low salary become the richest person in the world? The answer lies in their stake in companies, stock options and huge valuations.
Elon Musk’s way of earning is completely different from that of ordinary corporate CEOs. Top executives of most companies take salaries and bonuses worth millions of dollars, but Musk made the path to his wealth not through salary but through ownership rights and stock-based compensation. Recently, SpaceX’s IPO filing revealed that Musk has been receiving an annual base salary of only $54,080 since 2019. This amount is considered to be less than the average household income of America. But the real game is about the stake in his company.
Earnings from SpaceX shares
According to reports, Musk holds about 50% shares of SpaceX and the voting control is also very strong. The estimated valuation of the company has reached above 1 trillion dollars. In such a situation, the value of his stake in SpaceX alone is being estimated at more than $600 billion. SpaceX has also prepared a special multi-planetary performance package for Musk. Under this, if the company achieves some big targets, Musk can get crores of additional shares. These include ambitious goals like increasing the company’s valuation to $7.5 trillion and establishing a permanent human settlement on Mars. Apart from this, he has also been given stock options. Stock option means the right to buy shares in the future at a fixed price. If the value of the company increases rapidly then the price of these shares increases manifold. This is the reason why despite the modest salary, Musk’s wealth continued to increase.
Musk’s salary model is different
At the same time, Musk’s salary model is different in Tesla also. They do not get traditional salary, but are given shares based on the performance of the company. Tesla said in a recent filing that a potential compensation package of about $158 billion has been prepared for Musk, but this will be available only if the company meets very big business targets. These goals include taking Tesla’s market value to $8.5 trillion, delivering 20 million vehicles annually, expanding the robotaxi network and expanding AI-based business. If these goals are met, Musk could get millions of additional Tesla shares.
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