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Elon Musk Earns $6.7B In 2020 By Exercising Stock Options Of Tesla

Tesla CEO Elon Musk received almost $6.7 billion as compensation in 2020 which is 11 times more than the next-highest-paid US CEO.

The source of this revenue is stock options. He exercised his right to buy Tesla shares at a pre-set price, as opposed to a salary or cash bonuses.

For this to happen, Tesla had to accomplish several business targets. Revenue growth, stock price, and other figures were determining factors for these targets. These factors were spelled out in a 2018 pay package It was approved by shareholders at the time.

After a meteoric 740 percent rise in the stock price of Tesla in 2020, Musk decided to exercise his right on stock options. Moonshot Packages are the name for such kinds of massive packages related to stock performance. Moonshot packages act as an incentive for the executives. This helps them boost the value of the company.

Since Musk’s unusually enormous one was approved in 2018, such awards have become more common. Last year, at least 15 executives got awards worth $100 million or more. As per Bloomberg, firms that have implemented similar award packages include Restoration Hardware, Paycom Software, and JPMorgan.

Due to Musk’s large pay for the year, the list had a button that allows readers to “Scale without Elon Musk.”

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Elon’s on-paper gains are $33 billion. This has put him at the top of Bloomberg’s annual pay list for three consecutive years. The second-highest-paid executive on Bloomberg’s list was Mike Pykosz. He is the CEO of Oak Street Health, which received $568 million.

In Spite of Musk’s high pay package, economic inequality between executives and rank-and-file workers reaches an all-time high. The median ratio between the pay for S&P 500 CEOs and their typical employees rose to 182 in 2020, up for the third year in a row. Some firms logged ratios in the thousands, as per Bloomberg.

Rahul Macwan

Rahul Macwan

A writer with a literary and cinematic appetite for highbrow matter.


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