Although the average salary package of a US CEO was almost 200 times higher than that of an employee in the middle pay scale of his company last year, Elon Musk’s record Tesla Compensation puts them in the shade in comparison.
Tesla shareholders on Thursday elected with overwhelming majority for restoring Musk’s 10-year compensation plan, which the company valued at $44.9 billion in April. The figure was higher earlier this year, but since then Tesla’s stock has fallen by about 25 percent.
The all-stock package, approved by the board and shareholders in 2018, rewards Musk for achieving milestones that include increasing Tesla’s market value, pretax profit and revenue.
A judge in Delaware rejected the application in January because the approval process was “deeply flawed.” The court ruled that Musk controlled the company’s board of directors and shareholders were not fully informed.
However, the company said Musk deserved the payment because he made Tesla the world’s largest electric vehicle maker and increased the company’s market value by billions.
Even with the revote, Musk still won’t get access to the stock options. Tesla is expected to ask the judge to reconsider her decision in light of the vote, and if she doesn’t, the company will likely appeal to the Delaware Supreme Court. The entire process could take months.
Regardless of the outcome, Musk’s compensation package – the largest compensation for a CEO of a publicly traded U.S. company – is far above what other CEOs have received. Here’s a comparison:
With the median CEO salary
The median salary package for an S&P 500 US CEO earned $16.3 million last year, accordingly Data analyzed for The Associated Press by EquilarIf you multiply that amount by 10 and get $163 million for a decade of work, Musk’s earnings would still be 275 times higher.
In her January ruling overturning the package, Delaware Chancellor Kathaleen St. Jude said McCormick wrote that Musk’s total package, then worth about $56 billion, was 250 times larger than the average pay plan of comparable CEOs.
With individual CEOs
The top earner in the AP survey was Hock Tan, CEO of artificial intelligence company Broadcom Inc. His package, which consists mostly of stock grants, was worth about $162 million when it was handed to Tan at the start of fiscal 2023. Thanks to a rising stock price, Broadcom in March valued Tan’s pay package plus older options he hadn’t yet exercised at $767.7 million, an amount easily dwarfed by Musk’s potential haul of 304 million shares worth nearly $45 billion.
Other CEOs at the top of the AP survey are William Lansing of Fair Isaac Corp ($66.3 million); Tim Cook of Apple Inc. ($63.2 million); Hamid Moghadam of Prologis Inc. ($50.9 million); and Ted Sarandos, co-CEO of Netflix (US$49.8 million).
Technically, Musk received no compensation last year because he was not given stock options, but he could become even richer if his pay package goes through.
With Tesla employees
It’s difficult to calculate what Musk’s annual salary would have been last year. The company says he got nothing. But if his compensation package goes through in court, his salary will be in the billions. According to the company’s proxy statement this year, the median annual salary of a Tesla employee who is not CEO was $45,811 last year.