Tesla shareholders recently voted overwhelmingly in favor of Elon Musk’s 10-year pay plan, which was valued at $44.9 billion by the company in April of this year. Despite a decrease in Tesla’s stock value of about 25% since then, Musk’s compensation remains staggering. This all-stock package, approved by both the board and shareholders in 2018, is tied to Musk achieving milestones such as raising Tesla’s market value, pretax income, and revenue. The package had previously been rejected by a Delaware judge in January due to concerns about the approval process. However, the company argued that Musk’s contributions, such as transforming Tesla into the top-selling electric vehicle maker globally, justified the compensation.

Comparing Musk’s compensation to the median CEO pay for S&P 500 companies reveals a stark contrast. The median CEO pay for a U.S. CEO last year was $16.3 million, which amounts to $163 million over a decade of work. In contrast, Musk’s proposed earning would be 275 times greater. Chancellor Kathaleen St. Jude McCormick’s January ruling described Musk’s original $56 billion package as being 250 times larger than the median peer CEO’s compensation plan. The top earner in the Associated Press’ survey, Hock Tan of Broadcom Inc., had a package valued at approximately $162 million. However, thanks to a surging stock price, Tan’s total compensation, including older options, skyrocketed to $767.7 million in March. Despite these impressive figures, Musk’s potential package of 304 million shares, worth nearly $45 billion, far exceeds any other CEO in the survey.

Aside from Hock Tan, other CEOs high on the list of top earners include 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 of Netflix ($49.8 million). While Musk technically received no compensation last year due to the lack of stock options, his potential earnings from the approved pay package could catapult him into the billionaire club. Calculating Musk’s hypothetical annual pay from the package is challenging, as the company reported he received no compensation in the previous year. However, if the CEO compensation package survives legal challenges, Musk stands to earn billions, significantly more than the median annual pay of a non-CEO Tesla employee in 2020, which was $45,811.

The enormous disparity between Musk’s compensation and that of other CEOs raises questions about executive pay practices and the value of such extravagant packages. The future of Musk’s $44.9 billion pay plan remains uncertain pending further legal proceedings, but regardless of the outcome, it serves as a prime example of the exorbitant sums being awarded to top executives in the corporate world.

Technology

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