Tesla and SpaceX CEO Elon Musk arrives to the inauguration of U.S. President-elect Donald Trump successful the Rotunda of the U.S. Capitol connected Jan. 20, 2025 successful Washington, DC.
Chip Somodevilla | Via Reuters
A mentation of this nonfiction appeared successful CNBC's Inside Wealth newsletter with Robert Frank, a play usher to the high-net-worth capitalist and consumer. Sign up to person aboriginal editions, consecutive to your inbox.
Tesla said it needed to incentivize CEO Elon Musk with a record-breaking wage package in bid to vie with his backstage companies, according to a proxy the institution filed past week.
The filing outlines a stock grant that could beryllium worthy $1 trillion if it each pays out. Tesla besides said Musk's different companies — chiefly SpaceX and xAI Holdings — present relationship for astir of his wealthiness and truthful volition bid astir of his attraction unless Tesla pays him more.
"A bulk of Mr. Musk's wealthiness is present derived from different concern ventures extracurricular of Tesla, and helium has much charismatic options contiguous than ever before," the proxy said. The wage bundle of up to 423 cardinal shares is necessary, it added, to forestall Musk from "prioritizing different ventures."
It volition beryllium up to shareholders to o.k. the package, of course. But the proxy highlights the surging valuations of Musk's backstage companies and the competing interests of xAI, SpaceX and Tesla.
Until past year, the immense bulk of Musk's wealthiness came from his Tesla stock. The Bloomberg Billionaires Index pegs Musk's wealthiness astatine astir $385 billion, portion Forbes estimates his wealthiness is astatine $436 billion. The quality is apt tied to his 2018 wage package, which is inactive successful quality and is valued astatine betwixt $60 cardinal and $100 billion. If the compensation program is restored, and/or helium receives an interim comp bundle projected successful the proxy, Musk's nett worthy is person to $436 billion.
Today, little than fractional of that luck comes from Tesla stock.
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Based connected his existent ownership of 13% of the company, Musk's Tesla shares are worthy astir $140 billion. Musk has argued that helium needs astatine slightest 25% of voting power of Tesla to forestall the institution from being taken implicit arsenic it develops highly delicate and almighty artificial quality exertion and robots.
At SpaceX and xAI, helium has much voting control, with 42% of SpaceX and a bulk involvement successful xAI. SpaceX is readying an insider stock merchantability that would reportedly worth the institution astatine $400 billion, astir treble its valuation past year. At the $400 cardinal valuation, Musk's involvement would beryllium worthy astir $170 cardinal — much than the worth of his existent Tesla stake.
xAI's valuation has grown adjacent faster, from $80 cardinal astatine the commencement of the twelvemonth to a imaginable $200 cardinal successful a caller fundraising round. Musk owns much than 50% of the company, putting his involvement good implicit $100 billion.
Together, Musk's involvement successful xAI and SpaceX are present worthy astir doubly arsenic overmuch arsenic his Tesla shares. Added to his stakes successful Neuralink — valued astatine astir $9 cardinal — and his different companies, his backstage institution wealthiness eclipses his Tesla wealth.
Of course, that whitethorn not beryllium for long. If helium is awarded the 423.7 cardinal shares of restricted banal successful the caller 2025 compensation plan, and if Tesla hits its people valuation of $8.5 trillion, Musk's Tesla shares would beryllium worthy implicit $2 trillion.
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