Tesla CEO Elon Musk Was Paid A Salary Of Only $37,584 In 2015

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Originally published on EV Obsession.

The CEO of Tesla, Elon Musk, took quite a different tack in 2015 as compared to many other auto manufacturer CEOs with regard to monetary compensation, with the popular public figure only taking home $37,584 in direct compensation for his work with the company, according to a recent filing.

It should of course be remembered here that Musk owns a huge stake in Tesla — one currently valued at somewhere around $9.5 billion. It should also be remembered that Musk was granted 5.27 million stock options in 2012 — that were supposed to serve as compensation for a decade or so. So, despite the relatively “low” salary, he clearly is being compensated.

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Other primary figures in the company took home notably more than Elon Musk. The company’s Chief Technology Officer JB Straubel received a salary of $250,560, and the company’s Vice President of Engineering Doug Field received a salary of $306,923, accompanied by $2,808,785 in stock awards, according to the filing.

Perhaps more notably though, and as reported by Bloomberg, Tesla’s new Chief Financial Officer Jason Wheeler — who was poached from Google late last year it should be remembered — was financially compensated to the tune of around $21 million. To be more specific here, Wheeler received a salary of $46,154 and around $20.85 million in stock option awards.

That’s an interesting financial picture. I wonder what will happen to these figures as the company ramps up production in anticipation of the Model 3 launch? Something else on my mind is whether or not CEO Elon Musk will actually be willing to step back from the company and relinquish his position, as he has said that he would, following mass market success. Who knows on that regard, as he seems to be a bit of a workaholic.

Reprinted with permission.

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James Ayre

James Ayre's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy.

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29 thoughts on “Tesla CEO Elon Musk Was Paid A Salary Of Only $37,584 In 2015

  • 5.27 million options spread over 10 years works out at about $130 million a year at current valuations.

  • That is how the 0.1% of this country game the system. The salaries, especially of the middle class are taxed beyond the flesh all the way to the bones. But the compensation of the 0.1% in terms of dividends, interests and stock options are only taxed at 15%. Thus Warren Buffet’s secretary is taxed at 38% while Warren Buffet’s effective tax after all his business-related deductions is less than 15%. It is the same with Musk, he can easily write-off many expenses related to his salary. Steve Jobs get paid only $1/year as CEO of Apple when he was still alive.

    • Articles showing how large a percentage of the total tax base is paid by the top decile, centile, 0.1%, and richest 60 billionaires always obscure that rich pay a lower percentage than the middle classes.

      • According to Citizens for Tax Justice (a left-leaning think tank), the rich pay about the same percentage as the middle class when all taxes (payroll, sales, property, etc) are included*. The overall system is a bit progressive for the bottom 40% of incomes, and approximately flat for the top 60%.

        This probably disguises a huge amount of variation in individual tax rates for the very rich. It is certainly possible for the very rich to pay less than a middle class tax rate, but apparently not everyone manages this. My guess is that things like the alternative minimum tax and vesting limits for incentive stock options prevent some from fully exploiting the capital gains tax benefits.

        *For source, google “Vox – Think the poor don’t pay taxes? This chart proves you very wrong.” Not sure about linking rules.

        • Also get hard, because of off shoring and shell corps. So that you can’t really find all their assets.

        • The extremely rich (the 0.1%, the billionaires) pay much much lower percentages than the middle class.

          The “middle class” tax percentage does stay about the same right up into the lower end of the richest 1%. You have to be in the richest 1/2 of 1% to start getting the superdiscount rates routinely.

          It’s aristocracy. Aristocrats like Mitt Romney pay 14%. Mere mortals pay 50%.

      • Marion is correct and so is Ross.

    • Musk only gets a dollar, that 37k is a formality because of minimum wage laws. Which also means Jobs had a salary.

      • Then Elon got $18 per hour?

        I doubt he’s hourly. But either way, minimum in California would be $10 / hour.

        • Elon is renowned for working absurdly long hours. Minimum wage would put him at 10.3 hours per day (assuming no days off).

          • But he’s only at Tesla part time anyway. He works at Space X too.

          • From CNN Money:

            The Tesla (TSLA) chief executive’s total compensation package in 2014 was $35,360, according to a regulatory filing. That would only get you half way to buying a Tesla Model S.

            But the founder of the electric car maker didn’t accept even that amount, and he didn’t receive any cash from stock or bonuses last year. In fact, Musk has never accepted his Tesla salary, according to the Wednesday filing.

            Tesla said it calculated Musk’s modest salary using what it called “annualized minimum wage requirements” under law in California, where the company is based.

          • So if he isn’t taking any money from Tesla, how is he paying his living expenses? And more importantly, how is he paying his child support? That’s what I’d like to know.

    • Too many American voters keep voting against their own interests and too many more cannot be bothered to vote in midterm elections.
      It’s all the fault of voters.

      • Are you suggesting that power and responsibility must go hand in hand?

    • He would pay 20% federal capital gains tax, and then another 13.3% for the state of California.

      He isn’t likely taking any money out, and thus, not even taxed. He’s got Space X too you know.

  • An honest headline would read: “Elon Musk evades income tax with artificially low salary”.
    I love the guy and it is normal practice but jeez.

    • He’ll get taxed higher with capital gains. It would make more sense to take a higher salary for tax purposes. Instead, it looks like he’s only taking out of Tesla, what he needs. He’s also got Space X and other assets.

      • The exact tax treatment depends on whether Musk’s options qualify as ISOs. ISOs pay capital gains tax and NSOs pay income tax. In both cases, the tax applies when he sells the stock. If he holds the stock for 20 years, the net present value of the tax bill is reduced by 20 years of discounting. With ISOs, he can avoid the capital gains tax (but not estate tax) by holding until death. With ISOs, he can donate some to charity and claim a deduction for their value without recognizing them as income. The alternative minimum tax can complicate the situation. But in summary, there are all sorts of ways to pay lower taxes through stock options.

        • Actually, much of Musk’s stock is founder’s stock: he paid for it outright, it wasn’t granted as options. So it’s all long-term capital gains (one of the lowest tax rates there is in the US). I believe it qualifies as small business stock (even better tax rate) because of how early he invested in it.

  • Please can you change this “It should also be remembered that Musk was granted 5.27 million stock options in 2012”
    He hasn’t been Granted them.
    He gets x amount for meeting company milestones

    Successful completion of the Model X Alpha Prototype;
    • Successful completion of the Model X Beta Prototype;
    • Completion of the first Model X Production Vehicle;
    • Successful completion of the Model 3 Alpha Prototype;
    • Successful completion of the Model 3 Beta Prototype;
    • Completion of the first Model 3 Production Vehicle;
    • Gross margin of 30% or more for four consecutive quarters;
    • Aggregate vehicle production of 100,000 vehicles;
    • Aggregate vehicle production of 200,000 vehicles; and
    • Aggregate vehicle production of 300,000 vehicles.

    good article on Fortune

    • I suspect he will never get the gross margin milestone. It keeps him trying, but it’s probably impossible. He’s gonna get all the others.

  • I can somewhat understand people being upset regarding highly compensated executives or owners of companies but that is supposed to be their incentive to work as hard as they do. I understand that is far from a perfect ideology but let’s also remember that while Musk’s overall % tax paid may appear low the actual amount of tax he contributes to the system will be far more than literally millions of Americans combined… how is that not fair? Ironically if often appears that many of those people barely paying any taxes seem to complain the most about what the rich do and don’t pay as if they have any understanding at all…

    • I know all about what the rich do and don’t pay, thank you very much. I analyze financials as part of my investment job and I read the tax code too.

      Musk’s doing things the right way. He invested in the company early on and he wins big money *if and only if* the company wins.

      The guys I don’t like are the CEOs who carry huge amounts away from companies while running the company into the ground — those guys are looters.

  • $37k AND the cool corner office.

    • And a really nice ride.

      • Want you mean is $1 and a cool corner office, as stated below he doesn’t receive his salary. And probably several very nice rides.

      • Lol! Yeah but no company gas card…

  • CEO comp packages can get very complex. But my favorite was at a company I worked for, the CEO took no pay one year. It was during the Internet software bubble pop, but then you look close and the board forgave a $10m loan. So he did just fine than you very much.

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