Is Elon Musk Worth $56 Billion?

By Douglas A. McIntyre Published May 17, 6:40AM EDT

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Is Elon Musk Worth $56 Billion? — © Maja Hitij / Getty Images News via Getty Images

24/7 Insights:

Shareholders will soon vote on Elon Musk’s compensation package.
Investors may judge what Musk is worth based on the price of their shares.

Tesla Inc. (NASDAQ: TSLA | TSLA Price Prediction) investors will soon vote on CEO Elon Musk’s $56 billion pay package. The package is complex because it relies on factors such as shareholder growth and the financial growth of the electric vehicle (EV) and energy company. The answer has two parts: whether the board can give him the package and when shareholders bought the stock.

A judge struck down an earlier pay package and said, among other things, that Musk was too close to board members. At that point, the package had a maximum value of $55.8 billion.

One of a public company board’s most important functions is at stake: it can almost without question set CEO pay. On some occasions, CEO pay packages are attacked by shareholders who want an individual “say on pay” vote. However, shareholders rarely reverse board decisions. The board has decided Musk’s package is fair and reasonable. So, based on the board decision metric, it is.

From a shareholder perspective, the pay package was put in place in 2018, when Tesla’s stock price was $20. It reached $381 in late 2021. It trades at $175 today. Investors who bought in 2018 and held, either to $381, or even $175, might think Musk has done a remarkable job. Those who bought at $381 may be very unhappy today.

Ultimately, public company boards are so powerful that the Tesla board can put Musk’s compensation on the current proxy where they think it should be. For shareholders, the “fairness” may be based on where they bought their shares.

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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.