Elon Musk’s Tesla and the most sought-after software company Nvidia are the two most important players in the bid to become the world’s largest company.
Even though Tesla is much smaller than Nvidia in terms of market capitalization, Elon Musk is earning 1,300 times more than Nvidia’s CEO Jensen Huang.
The shareholders of Tesla have voted in favor of Elon Musk for reinstating his pay package, which is high at $55.8 billion.
This news is important in light of the judgment by a Delaware Judge, who rejected this pay package earlier this year. The final value of Musk’s pay package is now settled at $48.4 billion after the share value of Tesla fell by 26% recently.
Even then, Musk retains his status as one of the most highly-paid CEOs, surpassing many other company heads such as Nvidia’s CEO Jensen Huang.
Moreover, Musk has threatened to leave the company with his plans to uplift AI in the future, if the pay package is rejected. The voting by the shareholders in his favor also signals the popular opinion that Musk should lead Tesla, despite the court ruling.
Elon Musk’s compensation was recently in the news after the shareholders of Nvidia voted to award a compensation of $34.3 million to its CEO Jensen Huang in 2024.
Even though Nvidia is much larger than Tesla, with a market capitalization of $3.11 trillion against Tesla’s $615.32 billion, the earnings of Elon Musk are 1300 higher than that of Jensen Huang.
Huang’s present pay package has increased by 60% from his previous year’s package, but still, he is one of the poorly paid CEOs in the USA.
Elon Musk’s Eponymous Pay Plan
Elon Musk’s compensation of mammoth proportion as Tesla’s CEO was first proposed in 2018 as a response to the stakeholders’ confidence in Musk’s ability to spearhead the company to new heights.
The original plan was to grant Musk buying options to acquire 20.3 million shares of Tesla, which was nearly 12% of the outstanding shares of the company for ten years. The original plan was to award these shares in 12 tranches, beginning at $100 billion.
Each tranche will see an increase of $50 billion until the amount reaches a maximum of $650 billion. There were also other milestones for Musk to achieve such as boosting Tesla’s revenue to $175 billion and its gross earnings to $14 billion.
The award of these stock options is conditional and can be claimed only if Musk completes all milestones slated for him.
The Delaware court ruling was based on the contention that the stakeholders were not adequately informed about the pay plan. The company is planning to relocate to Texas to avoid this court ruling.
What makes Elon Musk such a High-valued CEO?
Elon Musk is a man of ideas and is thought to have the potential to transform the technical architecture of the world with his innovative ideas.
In the 2024 annual meeting of the shareholders, Musk announced his plans to unveil the Optimus humanoid robots, which is set to take the market capitalization of the company to $25 trillion.
The stakeholders do not view this as an unrealistic goal because Tesla has already proved its mettle by reaching a market capitalization of $1 trillion in October 2021.
The Optimus humanoid robots are slated to be a big invention and are expected to take over household responsibilities in the future such as cooking, cleaning and even teaching children. Tesla’s announcement about this robot, the launch of which is still undecided, itself has increased the value of Tesla’s shares.
Moreover, Musk’s innovations in the space of EV vehicles such as Cybertruck, Supercharge network, and driverless cars have also helped in reinstating Tesla as a highly valued company.
Elon Musk, being the master brain behind all these innovations, has all the power to command a larger share of the company, Making him one of the richest CEOs in the world.
Also, Read: Elon Musk Declines Crypto On Twitter: What Led To This Move?
Conclusion
Tesla and other companies under the leadership of Elon Musk such as SpaceX, xAI, X Corp, Neuralink, and OpenAI are all making optimal use of AI technology.
If the trend continues, Elon Musk will also continue to be a big figure in the market.
