How Elon Musk’s $44.9 billion Tesla pay package compares to other US CEOs’ most generous plans

Even though the median compensation of U.S. CEOs last year was nearly 200 times that of a worker in the middle of their company’s pay scale, Elon Musk’s record compensation at Tesla dwarfs them in comparison .

Tesla shareholders voted overwhelmingly Thursday to reinstate Musk’s 10-year compensation plan, valued by the company in April at $44.9 billion. It was worth more at the start of the year, but Tesla’s stock value has fallen about 25% since then.

The package, approved by the board and shareholders in 2018, rewards Musk for achieving key milestones including increasing Tesla’s market value, pre-tax profit and revenue.

It was thrown out by a Delaware judge in January, who said the approval process was “deeply flawed.” The court ruled that Musk controlled the company’s board of directors and that shareholders were not fully informed.

But the company said Musk deserved to be paid because he made Tesla the world’s best-selling electric vehicle maker, increasing its market value by billions.

Even with the reapproval vote, Musk will not yet have access to stock options. Tesla is expected to ask the judge to review her decision in light of the vote, and if she doesn’t, the company will likely appeal the decision to the Delaware Supreme Court. The whole process could take months.

Whatever the outcome, Musk’s package – the largest award given to a CEO of a US public company – is far greater than that given to other CEOs. Here’s how the package compares:

WITH MEDIAN CEO COMPENSATION

Last year, the median salary for a U.S. S&P 500 CEO was $16.3 million, according to data analyzed for The Associated Press by Equilar. If you multiply that by 10 to get $163 million for a decade of work, Musk’s earnings would still be 275 times greater.

In her January ruling that struck down the plan, Delaware Chancellor Kathaleen St. Jude McCormick wrote that Musk’s plan, then worth about $56 billion, was 250 times higher than the median CEO compensation plan.

WITH INDIVIDUAL CEOS

The top beneficiary of the AP investigation was Hock Tan, CEO of artificial intelligence company Broadcom Inc. His package, consisting mostly of stock awards, was valued at about $162 million when he was handed over to Tan at the start of the 2023 financial year. Broadcom in March valued Tan’s salary package, as well as old options he had not yet cashed in, at 767.7 million dollars. That’s an amount easily dwarfed by Musk’s potential 304 million shares worth nearly $45 billion.

Other CEOs topping AP’s 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 ($49.8 million).

Technically, Musk received no compensation last year because he was not granted any stock options. But he risks becoming even richer if his salary is respected.

WITH TESLA WORKERS

It is difficult to calculate what Elon Musk’s annual salary would have been last year. The company says it hasn’t received anything. But if his compensation manages to be taken to court, his salary will run into billions. According to the company’s proxy filing this year, the median annual salary for a non-CEO Tesla employee last year was $45,811.