Why Elon Musk Has Never Taken a Paycheck from Tesla
He might have a $21 billion net worth, but that isn't coming from his salary.
Elon Musk is one of the most notorious entrepreneurs in the world. Sure, he’s worth a staggering $21 billion from founding companies like SpaceX, PayPal, and The Boring Company, but he also has quite eccentric ways of doing business—like the fact that he’s never earned a salary from Tesla.
By California law, Elon Musk does need to earn at least minimum wage from Tesla, so he does technically get a salary to the tune of about $37,000 every year. The thing is, he never actually uses that money. “I don’t cash it,” he told the New York Times. “It just ends up accumulating in a Tesla bank account somewhere.” If you think that’s crazy, find out why Elon Musk says it’s OK to walk out of meetings.
It’s a pretty characteristic move from the CEO who made headlines in 2018 by announcing a ten-year Tesla pay plan that would keep him from earning a salary (or bonuses or guaranteed shares) from the company for ten years. He’d be given stock options instead, but he’d only get the payouts if the company reached certain milestones, the first one being a $100 billion market value. To put that in perspective, Tesla was worth $59 billion at that point. If all goes according to Musk’s (very ambitious) plan, Tesla will be worth $650 billion by 2028, and he’ll have more than $50 billion in stocks. If the company never reaches that growth, though, Musk will never see all that cash.
Other Silicon Valley CEOs might not go through all the extremes that Musk does, but giving up a salary actually isn’t unheard of among the One Percent. Absurdly rich tech CEOs like Facebook’s Mark Zuckerberg, and Google’s Sergey Brin and Larry Page joined the “$1 Salary Club” by turning down high wages for—you guessed it—pay of a measly, symbolic dollar. Don’t miss these other 26 things rich people won’t tell you about their habits and lives.
But here’s the thing: Just because CEOs are making $1 salaries doesn’t mean their bank accounts really only go up by one digit a year. Even if they give up bonuses, too, they still get to take advantage of high-value stock options. “The dollar salary really for them is meant to signify that they have large stakes in their company,” Aaron Boyd, director of governance for Equilar, told Forbes. “The value they’re going to receive—the compensation they’ll earn—is coming solely from their stock.”
By publicly waiving a salary from their companies, CEOs like Musk are basically telling the world that they’ve got a good thing going, and they have no doubt that it will keep up its momentum. Of course, that’s also on top of the billions they’ve already earned from past salaries, other projects, and company stocks.
Elon Musk has made it clear that his dreams aren’t about making money but shooting for the stars—literally—with ideas like colonizing Mars and turning humans into cyborgs. When you’ve got goals like that (not to mention a huge net worth from company stocks and from selling old companies like PayPal), you can brush away tens of thousands of dollars without batting an eye. If you want to get a little bit closer to Elon Must status, check out these 16 money tips from the world’s most successful people.