Rama Krishna Sangem
World’s richest man Elon Musk is also the highest paid man on the planet – with 1 trillion US dollars per year. Tesla shareholders approved a potential $1 trillion compensation package for Chief Executive Officer Elon Musk, the largest payout ever awarded to a corporate leader. Musk would have to meet certain goals to get the full payout.
Comcast Corp., owner of the European pay-television service Sky, is in talks to buy ITV’s media and entertainment unit in a deal that would dramatically shake up the UK broadcasting landscape. The Opening Trade has everything you need to know as markets open across Europe. With analysis you won’t find anywhere else, we break down the biggest stories of the day and speak to top guests who have skin in the game. Hosted by Guy Johnson and Kriti Gupta. (Source: Bloomberg).
Musk, already the richest person on the planet, will become the world’s first trillionaire. The proposal was approved with over 75 per cent support. Musk does not draw a traditional salary. Instead, the approved package comes as a stock grant that could award him up to 423.7 million additional Tesla shares over the next decade, CNN reported.
Conditions apply
The plan does not automatically make Musk a trillionaire. The stock grant will be distributed in 12 tranches, contingent upon Tesla achieving specific operational milestones and growing its market valuation in $500 billion increments, according to The Washington Post. To earn the full package, Musk must help lift Tesla’s market value to $8.5 trillion, a leap that requires shares to surge roughly 466 per cent from current levels, CNN stated.
For each $500 billion increase in Tesla’s valuation, Musk unlocks an additional 1 per cent of the company’s shares, growing his stake that already exceeds 15 per cent and is worth over $200 billion. The Tesla board retains some discretion over the awarding of these tranches, The Washington Post reported.
The first tranche of stock is set to be released if Tesla reaches a market capitalisation of $2 trillion. The company’s current market cap is $1.54 trillion, CNBC reported.
Subsequent tranches would be triggered by $500 billion increments, up to $6.5 trillion, while the final two would require $1 trillion increments, with the total market value reaching $8.5 trillion. These awards are paired with operational goals to ensure performance aligns with valuation gains.
Ambitious targets
Financial targets are equally ambitious. Tesla must achieve a trailing 12-month adjusted EBITDA of $50 billion to unlock the first tranche of shares and sustain $400 billion per year to claim the full award, according to a Wall Street Journal report. Last year, Tesla posted an adjusted EBITDA of $16 billion, down from a 2022 peak of $19 billion. Will Musk raise to the occasion and meet his targets? Will he be able to avail the world’s highest pay package, by fulfilling the conditions set by Tesla board? Wait and see!
