from qubit herein, of: Guhao Nan, fish sheep.
The soaring momentum of Tesla’s stock price is simply astonishing.
In just one month, the market value has soared from a staggering US$190 billion to US$270 billion.
More than the combined market value of Toyota, Volkswagen and Hyundai.
According to Bloomberg News, Elon Musk’s net worth has soared to $74.2 billion. Overtaken Buffett on the billionaire rankings.
In this regard, Bloomberg said that for Musk, this also means that after the first $775 million salary from Tesla, the Silicon Valley Iron Man is ready to receive the second Future options are rewarded——
About 1.69 million shares, valued at US$2.4 billion, or approximately RMB 16.794 billion.
Musk’s “Pay Slip”
The impression that people have always been: Tesla is Musk and Musk is Tesla.
However, between enterprises and entrepreneurs, it is also necessary to settle accounts.
So, from the beginning of 2020 to the present, Tesla’s market value has more than tripled. How much money can Musk make from it? May wish to help “calculate an account” together.
It should be noted that Musk does not receive wages at Tesla, even if it is the minimum wage set by the California government, he also donated it.
His compensation comes entirely from option awards.
In 2018, Tesla’s board of directors and CEO Musk reached the largest corporate compensation agreement in history.
According to Tesla’s estimates, this agreement includes 20.3 million options, divided into 12 batches. If all goals are achieved, Musk will receive more than US$50 billion (about 350 billion yuan) in revenue, more than Any technology company executive in history.
“the strongest incentive plan in history”
At the time, Tesla’s market value was approximately $50 billion. The agreement stipulates that afterwards, Musk can unlock a level of stock option rewards for every level of Tesla’s market value and profitability.
In this plan, Tesla’s market value is divided into 12 levels. The first level is 100 billion U.S. dollars, and each level increases by 50 billion U.S. dollars. The highest is the market value of 650 billion U.S. dollars within ten years of the release of the plan.
Of course, in this plan, business performance is also an important evaluation dimension.
The requirements are specifically divided into two aspects: revenue, profit before interest, tax, depreciation, and amortization (EBITDA).
Each aspect has 8 levels, with a minimum revenue of 20 billion U.S. dollars and a minimum profit of 1.5 billion U.S. dollars.
△Picture via: Business Insider
In addition, at each stage of the reward, Musk has the right to purchase up to 1,688,670 Tesla shares at a price of $350.02 per share (that is, the closing price when the agreement is signed).
Without the issuance of additional shares, if Tesla reaches a market value of $100 billion, the stock price will reach at least $539.46.
So only in the first stage, Musk’s net profit per share is at least $189.44.
△Picture via: Business Insider
It should be noted that, for this “strongest incentive plan in history”, the terms of the bet are not acceptable to the general CEO——
If either of the two indicators in a stage is not completed, Musk’s income for this period will be 0.
At the same time, the compensation plan also stipulates that the stock option rewards that Musk received must be held for 5 years before being sold. During this period, Musk will also pay taxes on this part of the proceeds.
Finally, to be rewarded, Musk needs to be deeply tied to Tesla and meet the conditions of appointment: until 2028, he must remain in Tesla and serve as CEO, or serve as chairman and chief product Officer-the CEO reports to him.
has been awarded the first stock option award
Although Musk lost the title of “Chairman” because of the air-mouth “privatization” incident, he did not reduce his real power and control in Tesla.
So, on May 29 this year, because Tesla’s average market value in the previous six months exceeded 100 billion U.S. dollars, annual revenue exceeded 20 billion U.S. dollars, and profits exceeded 1.5 billion U.S. dollars, the first phase goal was reached. CEO Musk received his first stock option award:
Approximately 1.69 million shares of Tesla stock options, with a total value of nearly $1.4 billion.
According to the content of the agreement, Musk can buy these shares at a price of $350, for a total cost of about $600 million. The profit that can be obtained after the sell-off is $775 million.
In other words, in this first-stage reward, in theory, Musk can make a profit of $775 million.
Then, here comes the question: Can this money really go to Musk’s pocket?
Buy or not, it’s a question
It’s not necessarily true.
As mentioned above, this money is not part of salary.
In addition, Musk will not be able to redeem option rewards into real money, at least in the short term.
The first reward that Tesla gave to Musk was a stock option award, allowing him to purchase a certain amount of Tesla stock at the lower price when the agreement was signed. After 5 years, whether to sell these stocks depends on Musk himself.
Therefore, at least two conditions are required to realize the reward:
Tesla stock rose.
Spend money to buy these stocks first.
The first condition has been fulfilled, but Musk is facing this question: These 1.69 million shares, buy, no money; sell? Refused.
Why don’t you want to sell: you want the stars and the sea without money
From the past, Musk has a high probability of not realizing Tesla stock.
His more likely move is to take the opportunity to buy this stock option and turn it into personally held shares to further expand his shareholding in Tesla.
On the one hand, Musk may care more about the control of Tesla than cash.
Because when Tesla went public, it did not use the common A/B shares of technology Internet companies, but the traditional “one share, one vote” system, which makes it impossible to be like other technology companies if Musk holds less than half of the shares. Like executives, they achieve absolute voting control over the company.
This obviously makes Musk very annoying. Many analysts say that the root cause of the last “privatization” is still in corporate control.
In an open letter to employees at that time, Musk also bluntly stated that “employees are harming the company’s long-term development for short-term interests,” and said that stock price fluctuations and complicated investment relationship management made it difficult for him to work normally.
Analysis of foreign mediaWhat Musk wants to do is to continue to increase his holdings of Tesla shares, increase his decision-making weight in the company, and ultimately promote Tesla’s delisting and privatization, and re-search for investors he considers appropriate.
At present, Musk holds 20.8% of Tesla’s shares and is the largest individual shareholder, but institutions such as FMR Financial Services Group and Columbia Investment Management Investment Consultants hold 39% of the shares, and the rest are scattered among small investors Hands.
In the case of Tesla not issuing additional stocks, if Musk’s compensation plan is successfully fulfilled every period and purchases all stock options, then by 2028, his shareholding ratio will reach 30.8%.
On the other hand, Musk also recently stated on Twitter that he can finally cash out through Tesla stocks to promote his other company, SpaceX, to complete the mission of conquering the sea of stars.
Basically, the purpose of my long-term holding of Tesla shares is to help humans conquer planets (such as Mars) in order to continue life. This will require a large amount of capital investment within 10 to 20 years.
But embarrassingly, now Musk does not even have enough cash on hand to buy bonus stocks.
? ? ?
You heard that right, “Silicon Valley billionaire Musk”, no money.
Previously, the “Wall Street Journal” speculated that Musk’s frequent real estate sales were in fact for the realization of cash options.
Why don’t you have money to buy?
First talk about his income.
In 1995, at the age of 24, Musk founded Zip2, a corporate information website.In 1999, Compaq spent more than US$300 million to acquire Zip2, and Musk got US$22 million from it.
In March 1999, Musk established X.com, an online financial services company. In 2000, this company merged with another company called Confinity, namely PayPal.
Two years later, eBay spent $1.5 billion on PayPal, and Musk received $165 million from it.
He used the money to support the early development of SolarCity, SpaceX and Tesla.
It was also from this time that using the money of a startup company to help another company develop has become Musk’s routine operation. Later, because of this method, Jia Yueting got Musk’s popularity.
So, after all, this multi-line combat method cannot be smooth sailing.
In 2008, the creation of 3 large and ambitious companies at the same time finally put Musk’s financial situation into crisis, and the initial financing and personal investment funds have bottomed out.
And the divorce case also made Musk lose the last 20 million US dollars. He said that he had to rely on friends to support him.
So far, the wealth he accumulated when he was young has been cleared.
In 2010, with the success of Tesla’s IPO, Musk came out of the crisis.
In addition, Musk’s investment also gave him a surprise.
Because of the successful investment in DeepMind (acquired by Google), he received a huge return of US$92 million.
Since 2010, Musk has invested in companies such as Halcyon Molecular, Vicarious and NeuroVigil. Except for the collapse of Halcyon Molecular, other companies have given him rich returns.
According to statistics, from 1995 to 2017, all his investment behaviors made a total of US$328 million in profits.
△Picture via: toptal
During this period, his net worth also increased significantly, from US$2 billion in 2012 to US$16 billion in 2017.
However, despite earning more, SpaceX’s rockets require more expenses—after all, an explosion would cost tens of millions of dollars in a gale.
So Musk has always been wearing the aura of a “billionaire”, but he didn’t actually have much cash on hand.
It’s even commonplace to find friends to borrow money and pledge shares in order to continue the Rockets business.
In March 2017, according to media statistics, Musk’s personal “external debt” totaled US$624 million.
In addition, SpaceX, Tesla and SolarCity, the interaction between the three companies often appears in the form of shared employees, investment, or actual business.
And Musk is the sun of this “Muskonomy” (Muskonomy).
There is still a large amount of complementary capital exchanges between the three companies. If one company is operating well, it will help another company in trouble.
For example, SolarCity issued more than $300 million in “solar bonds”, 90% of which were bought by SpaceX. Musk bought a lot of money himself.
So to be more honest, “Billionaire Musk” is actually just a number.
According to Bloomberg News, now, as Tesla’s stock price has soared, Musk’s net worth has soared to $70.5 billion.
But this is only paper data, 70.5 billion US dollars, basically the value of each company’s stock.
Musk’s realization is naturally not difficult.
But do you think Musk will sell stocks to cash out and count the money to live?
the richest pauper on earth
Yes, Musk is the richest pauper on earth.
Although financial freedom has long been and there is no shortage of material wealth, it is indeed too poor without cash.
He himself once said that the ultimate goal is to establish a human colony on Mars, beyond this goalThe profit-making behavior is meaningless.
Tesla’s accumulated travel, artificial intelligence, new energy technology, and SpaceX’s low-cost commercial space exploration have shortened the distance between humans and Mars step by step.
His unique business method is also beginning to show results. Now Tesla and SpaceX are already profitable and can provide blood to SolarCity, and the “Musk” galaxy has begun to form a positive cycle.
And “the richest pauper on earth” is the price Musk paid for his dream.