Elon Musk’s Annual Income
Elon Musk, a prominent figure within the technology industry, is known for his current position as the CEO of Space Exploration Technologies (SpaceX) and Tesla Motors. In addition, Musk is the chairman of SolarCity, a company producing solar panels, and serves as the co-founder of OpenAI, a non-profit artificial intelligence research organization. Given all his current positions, how much does Musk make annually?
To get a clearer idea of Elon Musk’s annual earnings, it’s important to understand the net worth of the companies Musk is involved with. For instance, Tesla Motors, which Musk is the CEO of, is estimated to be worth $54 billion as of 2020. Similarly, Space Exploration Technologies (SpaceX) is estimated to be worth $36 billion. Lastly, SolarCity’s current net worth is estimated to be at $3 billion. With these figures in mind, we can now gain an understanding of Elon Musk’s annual salary.
In 2018, according to the Securities & Exchange Commission, Elon Musk earned an astonishing $2.3 billion as total compensation for the year, making him one of the highest paid executives in modern history. However, approximately $2.2 billion of this compensation was stock-based. According to Musk’s compensation plan from 2012, he would receive no salary or cash bonuses but instead receive stock options in increments of 1% of Tesla’s total outstanding shares in the company.
In 2019, Elon Musk’s earnings were relatively similar to 2018. Elon Musk gained a state-of-the-art headline-grabbing salary of $2.3 billion with a combination of cash and stock packages, paired with a performance-oriented bonus. Musk made $650 million in cash and then earned the remaining $1.656 billion in stocks. According to his employment agreement, Musk is currently eligible to receive additional stock options if Tesla Motors’ market capitalization reaches specific thresholds.
It is difficult to estimate how much money Elon Musk currently has. Musk has used the proceeds from his many projects to make philanthropic investments, such as donating $500 million to charities in 2018. Nonetheless, Elon Musk was ranked the second-richest person in the world as of April 2021, boasting a net worth of $165 billion. It is clear that his annual earnings are a direct contributor to this extremely high net worth.
SpaceX Impact on Elon Musk’s Annual Earnings
It is important to recognize how valuable Space Exploration Technologies (SpaceX) is to Elon Musk’s annual earnings. SpaceX is the most profitable of all of Musk’s companies and it provides him with the majority of his income. SpaceX’s current projects include providing launch services for satellites, shuttling supplies and people to the International Space Station, and ultimately, sending people to the Moon and other planets.
The company has been highly successful thus far, having launched over 70 orbital missions to Earth’s orbit and beyond. SpaceX has rapidly gained government contracts, made dozens of launches and provided enough efficient designs to establish it as the premiere private space exploration business. In 2020, SpaceX raised $1.9 billion in financing, with pre-existing investors such as Google and Fidelity investing another $1 billion. This is the second largest investment raised by a private company in the United States.
SpaceX has paying customers, including the military, NASA and other commercial entities, thus making the company an incredibly profitable venture. According to Equilar estimates, in 2020, Elon Musk earned an estimated $737 million in stock options, making it the largest amount cashed out in a single year by any executive in the United States. His stock awards eclipse any other executive compensation package in 2020, including those of Apple CEO Tim Cook and Alphabet-Google CEO Sundar Pichai.
Furthermore, this annual income is used to fuel SpaceX’s next major project: the Starship. This project will revolutionize the space industry and encourage competition among the commercial space launch market. It is clear that Elon Musk is heavily relying on his annual earnings to help fulfil his dreams of creating a Starship.
Effect of Tesla Motors on Elon Musk’s Annual Income
Tesla Motors is a major contributor to Elon Musk’s annual earnings. Tesla Motors is a zero-emission automobile company founded by Elon Musk in 2003. The vision behind the company was to create an electric vehicle that can accelerate from 0-60 mph in under 10 seconds and also be stylish and safe. Since its creation, Tesla has revolutionized the automotive industry and it has become one of the most successful companies in the world.
In 2020, Tesla’s total estimated sales were $31.5 billion, a significant increase from $24.6 billion in 2019 and $21.5 billion the year before. According to analysts, Tesla is expected to reach $42.5 billion in sales by 2021. Musk has poetically changed the way the world views electric cars and this has allowed the company to have tremendous success.
Elon Musk’s role at Tesla Motors is a major reason why the company is so successful. As CEO, he has the ability to make decisions in an efficient manner and he is also able to implement creative ideas into the design of the cars. In addition, Musk is often seen actively promoting Tesla Motors on social media, which attracts potential customers and investors in the company. It is no surprise that with such high profits, part of it lands in Elon Musk’s pocket.
In addition to Tesla Motors’ profits, Elon Musk has profited from the entire Tesla model series. From the more accessible Tesla Model 3 that sells for $35,000 all the way to the market-leading luxury Tesla Model X which sells for $80,000, Musk has a stake in Tesla’s entire lineup. In 2019, it was estimated that Elon Musk made $4.4 billion in stock options from Tesla, making up a majority of his annual earnings.
SolarCity Impact on Elon Musk’s Annual Earnings
SolarCity is another one of Elon Musk’s companies that has had a profound impact on his annual earnings. SolarCity is a solar power company co-founded in 2006 by Musk and two other investors. Initially, the company’s mission was to make solar energy readily available and affordable to the general public. SolarCity allows people to produce their own electricity on rooftops and then sell the excess energy to their local energy grid.
On average, SolarCity’s energy panels produce over 70 GW annually and the company’s current net worth has grown to $3 billion. SolarCity has been a major player in the renewable energy sector and it has been growing steadily in recent years. In 2020, it acquired the Minnesota solar power generation company Skyline Innovation and plans to expand its energy portfolio.
Elon Musk’s involvement in SolarCity has had a direct impact on his annual earnings. In 2016, Elon Musk earned $33 million from SolarCity and $67 million overall from his companies in the same year. In 2020, it was estimated that he earned approximately $2.7 billion from Tesla alone. It is clear that SolarCity is an important contributor to Musk’s annual earnings.
OpenAI Influence on Elon Musk’s Earnings
OpenAI is a non-profit artificial intelligence research organization that was founded in 2015 by Musk and several other investors with the mission of advancing digital intelligence in a safe and effective way. OpenAI is currently funded with $1 billion in donations, most of which came from Tesla which donated $165 million in stock.
At the forefront of OpenAI’s efforts are its natural language processing advancements, generative models and reinforcement learning applications. The technology developed by OpenAI is being used in products like voice assistance and healthcare services. Musk has had a major role in this movement and he has been able to monetize his investments in OpenAI.
In 2017, Forbes estimated that Elon Musk earned around $17 million from OpenAI, plus additional millions that he has made over the course of the years. OpenAI has become one of the most active AI research organizations in the world and its technology is constantly being implemented into products and services. Although OpenAI is not as profitable as Tesla Motors or Space Exploration Technologies (SpaceX), it still adds to Elon Musk’s annual earnings.
Bitcoin Investment Effect on Elon Musk’s Annual Income
On February 8, 2021, musk made headlines when he announced his investment into Bitcoin. Musk had initially hesitated to invest into the cryptocurrency but changed his stance when he realized how lucrative the asset is. According to a public filing, Musk invested $1.5 billion of Tesla’s cash reserves into Bitcoin on February 8, 2021. The purchase of Bitcoin was part of Tesla’s new strategy to diversify and maximize its returns on cash.
By April 2021, Tesla’s Bitcoin purchases were estimated to be worth over $2.5 billion. This has also enabled Musk to become the holder of 0.25% of the Bitcoins mined since 2009. With the volatile Bitcoin market, it is hard to tell how much money Elon Musk will make from his investments. Despite this uncertainty, it is clear that his investments will have an impact on the total amount he makes each year and his current net worth.
Musk’s Investments in Other Technologies
In addition to the investments mentioned above, Elon Musk has invested in aerospace development companies and several energy companies. He has also invested in various start-ups, as he has been known to take an interest in innovative companies that are dedicated to pushing the boundaries of what is possible. His investments are spread out across dozens of companies and this further adds to his total annual earnings.
In 2020, it was estimated that Musk made a total of $4 billion in stock options, with the majority of it coming from Tesla Motors. He has also made lucrative investments in other technologies and companies, such as The Boring Company and Hyperloop, a transportation system that promises to transport people across distances at lightning-fast speeds.
To summarize, it is clear that Elon Musk earns a lot of money from his various positions as CEO of Tesla Motors and chairman of SolarCity, as well as from his investments in various companies. In 2020, Elon Musk is estimated to have earned a total of $2.3 billion, with most of it coming from stock options. With such a large annual salary and investments, it is no surprise that Musk is currently the second-richest person in the world.
