Elon Musk is a South African-born entrepreneur and engineer who is the Chairman and CEO of Tesla, a US-based electric car manufacture founded in 2003 and headquartered in Palo Alto, California. Musk is also the founder and CEO of SpaceX, a rocket and spacecraft company as well as the founder of The Boring Company and co-founder of OpenAI. In May 2018, Elon Musk cemented his place as one of the world’s richest individuals with an estimated net worth of $20 billion
Tesla, Inc. was established to produce the world’s first fully electric cars. The vehicles were intended to provide a superior driving experience through high performance, safety, and reliability. Tesla has gone on to become one of the world’s leading manufacturers of electric vehicles. Tesla shares are actively traded on the Nasdaq. As of June 2020, the stock price of Tesla Inc. is approximately US$890 per share.
As the Chairman and CEO of Tesla, Inc., Elon Musk holds a significant number of Tesla shares. As of June 2020, Musk owns approximately 32.9 million shares in Tesla, according to company filings. This comprises approximately 21.8% of Tesla’s total outstanding stock, making him one of the largest individual shareholders in Tesla.
Musk’s ownership of Tesla shares is a large and extremely valuable asset for him. In 2018, for example, Musk made over $761 million from his Tesla shares. Furthermore, Tesla’s stock has risen from around $350 in 2017 to over $900 in 2020 – an increase of over 150%. Given Musk’s extensive number of shares, this represents a huge increase in his wealth.
Apart from his ownership of Tesla shares, Elon Musk also has a potential future payment from Tesla. In 2018, Tesla granted Musk a performance-based compensation plan, which could reward him with up to $55 billion over the coming years. This package is entirely dependent on Tesla’s stock price, and Musk will not receive any payments unless Tesla achieves a certain valuation level.
It’s important to note that Elon Musk does not own the majority of Tesla’s shares – institutional investors such as BlackRock, Baillie Gifford, and Fidelity Management each own a greater portion of stock than Musk. It is nevertheless significant that Musk’s wealth is so heavily tied to the value of Tesla’s stock.
Musk’s ownership of Tesla shares is largely due to the fact that he founded the company in 2003. In the company’s early days, Elon filled the role of both CEO and CTO and invested a significant amount of capital to launch the company. Musk also provides important strategic input and guidance as the company’s Chairman and CEO, making his large ownership invaluable in terms of oversight and leadership.
Furthermore, Musk has indicated that his large ownership is intended to align his interests with those of Tesla’s other shareholders. This can be seen from his statement at the Tesla 2018 Annual Shareholders Meeting where he stated: “I own about 20% of the company. My sentiment hasn’t changed for the last two years about this, which is that the majority of my efforts, material resources, and convictions surrounding Tesla are dedicated to helping the company succeed.”
Elon Musk’s Impact on Tesla’s Value
Without a doubt, Elon Musk has been a key driving force in the success of Tesla, Inc. His visionary leadership has turned the company from a small startup into one of the world’s most valuable automakers. Over the years, Musk has effectively used the latest technologies and strategies to create an innovative and successful business model. As a result, Tesla’s stock prices have increased significantly since the company’s inception.
Musk is also responsible for providing Tesla with access to capital to fund its various projects. His active presence on social media, energy and enthusiasm have been essential to raising investor interest and confidence in Tesla. Additionally, Musk’s leadership is believed to have instilled a sense of stability and trust within the company.
Elon Musk’s ownership of Tesla shares represents a significant portion of his wealth. His shares in the company account for a large part of his current net worth as indicated by his estimated worth of $20 billion in May 2018. In addition, his potential future payment from Tesla could add up to a staggering $55 billion, further increasing his wealth.
As Tesla continues to grow and expand, so too does the value of Elon Musk’s Tesla shares. Therefore, it is likely that his net worth will continue to grow significantly in the coming years. Currently, his net worth is estimated to be around $37.5 billion, making him the sixth-richest person in the world.
The fact that Musk owns a significant portion of Tesla shares has caused some controversy among some investors. Some of these investors have questioned whether Musk’s incentives to own a large portion of Tesla shares are in line with other shareholders’ interests. Other investors have argued that Elon’s ownership of the company’s shares gives him too much power and influence over other stakeholders.
Despite this, the majority of shareholders believe that Musk’s ownership of Tesla shares is beneficial for the company and for other investors. This is because it aligns Musk’s interests with those of other shareholders and incentivizes him to ensure that Tesla’s stock price continues to rise. As such, most investors remain positive about Elon’s ownership of Tesla shares.
Conclusion of Elon Musk’s Worth to Tesla Inc.
It is clear that Elon Musk’s ownership of a large portion of Tesla shares is a major asset for the company. His leadership and technological expertise have helped Tesla achieve great success since its establishment in 2003. Furthermore, his active presence on social media and enthusiasm have earned the trust of investors and boosted Tesla’s stock prices.
Apart from his ownership of stock, Musk has also been rewarded with a potential future payment from Tesla. If the company’s stock reaches a certain price level, Musk could receive up to $55 billion over the coming years. Musk’s ownership of Tesla shares makes him one of the world’s wealthiest individuals with an estimated net worth of $37.5 billion.
Musk’s Ownership of Stock and Rejection of Salaries
Interestingly, Elon Musk has refused payment from Tesla for his roles as Chairman and CEO. Instead, Musk opted to take a nominal salary of $36,000 a year, which is about one-tenth of the amount that a typical Fortune 500 CEO would make. Furthermore, Musk does not receive stock options or other performance-based compelling incentives – instead, his economic interests are aligned with those of other shareholders through his 32.9 million Tesla shares.
The fact that Elon refused a salary and chose to focus on the success of Tesla is a testament to his ethical leadership. His personal stake in the success of Tesla helped to create a culture of innovation and ownership amongst the company’s staff. Furthermore, by preferring to invest in the company rather than taking further pay for himself, Musk has affirmed that he is more focused on the success of the company than his own financial reward.
The Role of Board of Directors in Transparency, Unbiased and Effective Leadership
In addition to Elon Musk’s involvement, another key factor in Tesla’s success has been the effective leadership of its board of directors. Tesla’s board of directors consists of seven members, the majority of whom are independent members. The board is responsible for providing strategic and operational advice to the management team in order to ensure that Tesla is successful.
The role of the board of directors is to ensure that Elon Musk’s decisions are based on the interests of shareholders, rather than his own personal financial gain. By working together, the board and CEO ensure that decisions taken are unbiased and support the success of the business. As a result, Tesla has been able to become one of the most valuable and successful automakers.
Conclusion of Tesla’s Structure for Leadership Success
Musk’s ownership of a large portion of Tesla shares is an extremely valuable asset for Tesla and its other shareholders. His influence and leadership have helped the company become one of the world’s leading automakers. Furthermore, his financial stake in the company demonstrates his commitment to its success. By working alongside an independent board of directors, Musk’s decisions are unbiased and in line with the interests of other shareholders.
