Why $20 Million Fine Means Nothing to Elon Musk

By Douglas A. McIntyre Updated Jan 11, 5:07PM EST · Published Sep 30, 7:03AM EDT

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In a settlement between the SEC and CEO Elon Musk and the company he runs — Tesla Inc. (NASDAQ: TSLA), Musk will lose his job as chairman. He will also have to pay a fine of $20 million, which means almost nothing to him. Depending on which estimate is used, his net worth is somewhere between $17 billion and $24 billion.

The reason for the settlements, according to Stephanie Avakian, Co-Director of the SEC’s Enforcement Division:

The total package of remedies and relief announced today are specifically designed to address the misconduct at issue by strengthening Tesla’s corporate governance and oversight in order to protect investors.

Part of the misconduct was Musk’s claim he might take Tesla private and had the capital committed to do so

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For Musk, the founder of Tesla, the lose of the chairman’s job has to sting. Worse still, Tesla has to hire an independent chairman who could have a role in throttling Musk’s tweeting and his comments about Tesla’s future. And, two new board members, also mandated by the SEC, could participate in doing the same

Forbes puts Musk’s net worth is put at $19.7 billion. The figure is mostly based on his ownership of space rocket and exploration firm SpaceX, and Tesla. By some estimates, recent fallout from negative reactions to his comments about taking Tesla private has dropped his net worth by $1 billion. SpaceX is private, so the value of his ownership is open to speculation.

Musk’s net worth may surge. He has a controversial Tesla pay package which could bring him $50 billion in the next decade. However, the goals he has to reach to get the money are lofty.

The SEC may have needed the $20 million fine to make it appear that it had nicked Musk in his wallet. Almost everyone knows otherwise.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.