Elon Musk, chief executive of Tesla and the world’s richest person, is set to collect a $23bn (£17.6bn) bonus after the electric car company’s reported record quarterly profits.
Musk, who is already sitting on an estimated $249bn fortune, is in line for the bonus share payout after Tesla hit share price and financial growth milestones in its earnings on Wednesday night.
Tesla made an adjusted profit of $5bn on revenue of $18.8bn in the first quarter of the year, an 81% increase on the same period a year earlier. The results, combined with the growth in Tesla’s share price performance, mean Musk has hit targets that should lead to a bonus share payout worth about $23bn.
The company outlined an extraordinary deal for Musk in 2018 that would pay him an unprecedented record $55.8bn (£40bn) bonus if he built the business into a $650bn company within a decade.
He achieved that milestone early, in January 2020. Tesla today has a market value of $1.1tn, after a 1,600% rise in its share price since the target was set in January 2018. The shares jumped 11% in early trading on Thursday to $10.60.
It means Musk, who collects no salary from Tesla, should now have unlocked the final three parts of the 12-tranche bonus scheme. Each tranche gives Musk the right to buy 8.4m Tesla shares at $70, a huge discount on the current $977 price of the stock. His profit on each tranche could be $7.7bn, or a combined value of $23bn. The payments need to be signed off by the board, and he must hold on to the shares for five years before selling.
Musk, who is attempting to buy Twitter for more than $43bn, said he was not in talks with Tesla’s board over a new bonus scheme after completing the 2018 deal early. “There are no discussions under way about incremental compensation for me,” he said on the company’s earning call with investors.
“The future is very exciting,” he added. “I’ve never been more optimistic or excited about the future of Tesla than I am right now.”
Julia Davies, a member of Patriotic Millionaires UK, a group of super-rich people campaigning for a more equal society, said Musk’s mega payday was “a perfect answer to the question: ‘When does a person have too much money?’
“What can one human possibly need with a bonus of $23bn? It’s time we gave big money a meaning, instead of allowing it to be just a number attached to a person. How many millions of people could be lifted out of current fuel poverty, through energy efficiency and renewable installations, with that bonus – instead of giving one man an even greater fortune to play God with?”
When Tesla revealed the bonus plan in 2018 it said: “Elon will receive no guaranteed compensation of any kind – no salary, no cash bonuses, and no equity that vests by the passage of time. Instead, Elon’s only compensation will be a 100% at-risk performance award, which ensures that he will be compensated only if Tesla and all of our stockholders do extraordinarily well.”