The filing is accurate — Musk received no base pay during the year. That’s in keeping with past practice at the company, although in prior filings, Tesla reported what Musk would have earned had he received California’s minimum wage. For 2019 that came to $23,760.
Under the compensation arrangement, Musk is eligible for options to buy up to 101 million split-adjusted shares of stock at an exercise price of $70.01 each. Those are being distributed in 12 equal tranches of 8.4 million options, based on the company hitting both financial milestones and achieving certain stock valuation targets.
So far in 2021 the company has hit two more financial milestones, qualifying Musk for an additional 16.9 million stock options. Those options would be worth $10.9 billion at today’s prices.
As is the case for most top executives who earn stock options, Musk has not actually exercised any of them. Typically options are only exercised when they’re due to expire, such as when an executive is leaving the company and would stand to lose them.
Sometimes executives sell shares to diversify their holdings or pay taxes, but Musk has rarely sold shares during his time with the company. As of June 30, he owned 170.5 million shares outright, and had options to purchase another 73.5 million shares, giving him control over 23% of the company’s stock.
Musk is one of the world’s richest people, thanks to both his Tesla shares and majority stake in his other company — privately-held SpaceX — of which he is also CEO.
Musk’s Tesla stake is worth $171.3 billion, counting both stock and options after taking into account their exercise price.
But his practice of not taking cash salaries has prompted him to borrow substantially as well. The Tesla filing Friday said 88 million of Musk’s Tesla shares have been pledged as collateral “to secure certain personal indebtedness.”
Although the total amount of Musk’s borrowing is not known, those 88 million shares are today worth $63 billion. The number of shares pledged as collateral was reduced by 4 million shares since the prior company disclosure in April.