Tesla Stock is on a Downward Spiral But Elon Musk’s Salary Remain in The Billions — Here’s Why

Tesla founder and CEO Elon Musk is one of the most innovative minds of today. There’s no doubt about that. However, it seems like his fellow businesspeople aren’t so impressed with his decisions regarding the management of the car company.

He’s been in quite a lot of controversies these past few years. While entertaining from a certain point of view, they spell trouble for Tesla as a corporate entity. And now, the revelation of his massive 2018 earnings as CEO is bringing in a new wave of criticism for the 47-year-old engineer turned businessman.

Top Paid CEO

The second highest-earning CEO for 2018 is David M. Zaslav (right) of Discovery, Inc. with $129 million

Now, it isn’t really news that CEOs make a ton of money. It’s just that Musk is in a whole other league. In fact, his 2018 compensation, which amounted to a jaw-dropping $2.3 billion, puts him on top of the list of the highest paid business executives. What’s even more shocking is that his total earnings match that of 65 other CEOs’ combined.

Of course, this disparity when it comes to annual salaries didn’t go unnoticed within business circles and publications. It was even highlighted by an infographic made by The New York Times. This is a result of the admittedly ‘uncommon’ compensation package that Musk enjoys thanks to Tesla’s board of directors. Technology columnist  Troy Wolverton has also observed that this means that the CEO still has control over a great part of the Tesla stock.

Tesla Clarifies

The company welcomed two new members to the board, Larry Ellison (left) and Kathleen Wilson-Thompson, after Musk’s damaging brush with SEC last year.

Meanwhile, the car company’s board of directors swiftly clarified the nature of Musk’s 2018 compensation, which they say is ‘misleading’ and ‘incorrect’. According to a spokesperson from Tesla, the CEO actually gets no salary, cash bonuses or equities from the company.

Apparently, all Musk gets at the end of the year is a performance award which rests heavily on his own ability to help the company raise its market capitalization from $40 billion to $100 billion. In reality, Musk’s annual ‘salary’ is tied with the company’s future success instead of a fixed number.

Stock Performance

Tesla stock has been seeing a steady decline since the latter part of the previous year

However, Musk’s massive earnings still don’t look good considering the problems that Tesla has been facing as of late. For example, the company’s stock is seeing a continuous decline coming into 2019 dipping below $200 in April.

It also follows a ‘tumultuous’ year for the corporation. According to reports from The New York Times, the electric car manufacturer is currently finding trouble in scaling up their production capabilities to meet the demand for their vehicles.

There’s also the issue of Musk’s infamous tweet which got the company in trouble with the Securities and Exchange Commission (SEC). It can be remembered that the CEO tweeted about possibly taking Tesla private in August of 2018 leading to a sudden SEC investigation and a costly legal battle that isn’t resolved yet.