Forget Musk's latest pay package, his last one could wipe out years of Tesla profits [View all]
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Source: Reuters
Tesla's gaudy $1 trillion executive-compensation package for CEO Elon Musk has obscured a more pressing concern: Musk's 2018 pay package -- still tied up in court -- could eat up years' worth of the electric vehicle maker's future profits.
The Delaware Supreme Court will soon decide whether to reverse a lower-court ruling invalidating Musk's previous record-breaking compensation package. If Tesla’s appeal fails, it could trigger a $26 billion hit to profits over two years to account for the replacement stock-compensation package it has promised Musk – at today’s much higher stock price.
For comparison, $26 billion would equal more than half of Tesla’s total net income since becoming profitable in 2019. Even if Tesla prevails in court, its profits could be squeezed over the next decade if Musk hits performance goals in his trillion-dollar pay package, with each goal triggering billions in payouts and accounting expenses.
The outsized profit impact highlights the inherent risks of Musk’s super-sized compensation. Even the largest public companies typically have little concern about bottom-line impacts from CEO pay. The richest packages are typically measured in hundreds of millions – not billions.
Read more: reuters.com/sustainability/sustainable-finance-reporting/forget-musks-latest-pay-package-his-last-one-could-wipe-out-years-tesla-profits-2025-11-20/
Essentially Eloon's friendly board of directors has approved a massive transfer of wealth from shareholders to Eloon.
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