Wealth of Elon Musk explained

Elon Musk made $175.8 million when PayPal was sold to eBay in October 2002.[1] He was first listed on the Forbes Billionaires List in 2012, with a net worth of $2 billion.[2] He is the founder, chairman, CEO, and CTO of SpaceX; angel investor, CEO, product architect, and former chairman of Tesla, Inc.; owner, executive chairman, and CTO of X Corp.; founder of the Boring Company and xAI; co-founder of Neuralink and OpenAI; and president of the Musk Foundation. He is one of the wealthiest people in the world, with an estimated net worth of US$191 billion, according to the Bloomberg Billionaires Index, and $182.6 billion according to Forbes, primarily from his ownership stakes in Tesla and SpaceX.[3] [4] [5]

Details

At the start of 2020, Elon Musk had a net worth of $27 billion.[6] By the end of the year his net worth had increased by $150 billion, mostly driven by his ownership of around 20% of Tesla stock.[7] During this period, Musk's net worth was often volatile. For example, it dropped $16.3 billion on September 8, the largest single-day plunge in Bloomberg Billionaires Indexs history at the time.[8] In November of that year, Musk passed Facebook co-founder Mark Zuckerberg to become the third-richest person in the world; a week later he passed Microsoft co-founder Bill Gates to become the second-richest.[9]

In January 2021, Musk, with a net worth of $185 billion, surpassed Amazon founder Jeff Bezos to become the richest person in the world.[10] Bezos reclaimed the top spot the following month.[11] On September 27, 2021, after Tesla stock surged, Forbes announced that Musk had a net worth of over $200 billion,[12] and was the richest person in the world. In November 2021, Musk became the first person to have a net worth of more than $300 billion.[13]

On December 30, 2022, it was reported that Musk had lost $200 billion from his net worth due to declining stock values in Tesla, becoming the first person in history to lose such a large sum of money.[14] [15] In January 2023, Musk was recognized by Guinness World Records for experiencing the "largest loss of personal fortune in history" with regards to his financial losses since November 2021, which Guinness quoted a Forbes estimate of $182 billion.[16]

Musk's personal wealth is managed by his family office called Excession LLC, formed in 2016 and run by Jared Birchall.[17]

Sources of wealth

Around 75% of Musk's wealth was derived from Tesla stock in November 2020, a proportion that fell to about 37% as of December 2022, after selling nearly $40 billion in company shares since late 2021.[18] Musk does not receive a salary from Tesla; he agreed with the board in 2018 to a compensation plan that ties his personal earnings to Tesla's valuation and revenue. The deal stipulated that Musk only received the compensation if Tesla reached certain market values.[19] It was the largest such deal ever done between a CEO and a company board. In the first award, given in May 2020, he was eligible to purchase 1.69 million Tesla shares (about 1% of the company) at below-market prices, which was worth about $800 million.[20]

The above stock compensation deal was invalidated by the Delaware court due to Musk controlling Tesla and having massive influence on the directors, making the compensation decision a "conflicted-controller transaction" which is subject to court review in Delaware law to be judged for fairness. Tesla is trying to reinstate the payment package via new shareholders votes.

Musk paid $455 million in taxes on $1.52 billion of income between 2014 and 2018.[21] According to ProPublica, Musk paid no federal income taxes in 2018.[22] He stated his 2021 tax bill was estimated at $12 billion based on his sale of $14 billion worth of Tesla stock.

Musk has repeatedly described himself as "cash poor",[23] [24] and has "professed to have little interest in the material trappings of wealth". In May 2020, he pledged to sell almost all physical possessions after a talk with Cory Spears. Musk has defended his wealth by saying he is accumulating resources for humanity's outward expansion to space.[25]

Notes and References

  1. News: Klebnikov . Sergei . August 8, 2017 . 8 Innovative Ways Elon Musk Made Money Before He Was a Billionaire . Money . live . April 13, 2021 . https://web.archive.org/web/20200809053228/https://money.com/8-innovative-ways-elon-musk-made-money-before-he-was-a-billionaire/ . August 9, 2020.
  2. News: Melby . Caleb . March 12, 2012 . How Elon Musk Became A Billionaire Twice Over . Forbes . February 17, 2021. https://web.archive.org/web/20220711120028/https://www.forbes.com/sites/calebmelby/2012/03/12/how-elon-musk-became-a-billionaire-twice-over/?sh=360739d01c88. July 11, 2022. live.
  3. Web site: The Top 10 Richest People In The World (February 2024) . Forbes . 6 February 2024 . en . February 6, 2024 . https://web.archive.org/web/20240206151700/https://www.forbes.com/sites/forbeswealthteam/article/the-top-ten-richest-people-in-the-world/\. live .
  4. News: Bloomberg Billionaires Index . . July 25, 2022 . July 8, 2017 . https://web.archive.org/web/20170708045857/https://www.bloomberg.com/billionaires/profiles/elon-r-musk/ . live .
  5. Real Time Billionaires . . August 27, 2017 . February 10, 2014 . https://web.archive.org/web/20140210112624/http://www.forbes.com/profile/elon-musk/ . live .
  6. News: Frank . Robert . January 7, 2021 . Elon Musk is now the richest person in the world, passing Jeff Bezos . CNBC . live . April 13, 2021 . https://web.archive.org/web/20210406160534/https://www.cnbc.com/2021/01/07/elon-musk-is-now-the-richest-person-in-the-world-passing-jeff-bezos-.html . April 6, 2021.
  7. News: O'Kane. Sean. January 7, 2021. Elon Musk passes Jeff Bezos to become the richest person on Earth . The Verge. February 17, 2021. https://web.archive.org/web/20221009075740/https://www.theverge.com/2021/1/7/22163361/elon-musk-billionaire-richest-world-jeff-bezos-tesla-stock-spacex. October 9, 2022. live.
  8. News: Pitcher . Jack . September 8, 2020 . Elon Musk Loses Record $16.3 Billion With Wild Wealth Swings . Bloomberg. live . February 23, 2021 . https://web.archive.org/web/20200927063219/https://www.bloomberg.com/news/articles/2020-09-08/elon-musk-loses-record-16-3-billion-with-wild-wealth-swings . September 27, 2020.
  9. News: Neate . Rupert . November 14, 2020 . Elon Musk overtakes Bill Gates to become world's second-richest person . The Guardian . live . February 17, 2021 . https://web.archive.org/web/20210114031157/https://www.theguardian.com/technology/2020/nov/24/elon-musk-bill-gates-tesla-share-price-microsoft . January 14, 2021.
  10. News: January 7, 2021 . Elon Musk becomes world's richest person as wealth tops $185bn . BBC News . live . February 17, 2021 . https://web.archive.org/web/20210108023023/https://www.bbc.com/news/technology-55578403 . January 8, 2021.
  11. News: Palmer . Annie . February 16, 2021 . Jeff Bezos overtakes Elon Musk to reclaim spot as world's richest person . CNBC . live . February 17, 2021 . https://web.archive.org/web/20210216231812/https://www.cnbc.com/2021/02/16/jeff-bezos-reclaims-spot-as-worlds-richest-person-from-elon-musk.html . February 16, 2021.
  12. News: Cai . Kenrick . September 27, 2021 . Elon Musk Eclipses $200 Billion To Become Richest Person in the World Again . Forbes . September 28, 2021 . September 28, 2021 . https://web.archive.org/web/20210928023801/https://www.forbes.com/sites/kenrickcai/2021/09/27/elon-musk-200-billion-richest-person-in-the-world/ . live .
  13. News: Haverstock . Eliza . November 2, 2021 . Elon Musk Is The First Person Worth More Than $300 Billion . November 4, 2021 . Forbes. https://web.archive.org/web/20220531073421/https://www.forbes.com/sites/elizahaverstock/2021/11/02/elon-musk-is-the-first-person-worth-more-than-300-billion-but-hertz-uncertainty-threatens-tesla-stock-tear/?sh=289580b521f4. May 31, 2022. live.
  14. News: Chappatta. Brian. December 30, 2022. Elon Musk Becomes First Person Ever to Lose $200 Billion. Bloomberg. September 19, 2023. September 19, 2023. https://web.archive.org/web/20230919020703/https://www.bloomberg.com/news/articles/2022-12-30/elon-musk-becomes-first-person-ever-to-lose-200-billion. live.
  15. News: Elon Musk is the first person in history to lose $200 billion . Woodward . Alex . January 1, 2023 . The Independent . January 11, 2023 . January 4, 2023 . https://web.archive.org/web/20230104193845/https://www.independent.co.uk/tech/elon-musk-net-worth-tesla-twitter-200-billion-b2254493.html. live.
  16. Web site: Gans. Jared . January 7, 2023 . Elon Musk secures world record for largest-ever loss of personal fortune . live . https://web.archive.org/web/20230109121749/https://thehill.com/policy/finance/3803661-elon-musk-secures-world-record-for-largest-ever-loss-of-personal-fortune/ . January 9, 2023 . January 10, 2023 . The Hill.
  17. News: Jin . Hyunjoo . Marshall . Elizabeth Dilts . April 26, 2022 . Funding obscured: The family office behind Musk's $44 billion Twitter buyout . Reuters . limited . https://web.archive.org/web/20230721100159/https://www.reuters.com/article/twitter-ma-musk-office/update-1-funding-obscured-the-family-office-behind-musks-44-bln-twitter-buyout-idUKL2N2WO1UY . July 21, 2023 . live.
  18. News: Higgins. Tim. December 23, 2022. Elon Musk's Finances Complicated by Declining Wealth, Twitter Pressures. The Wall Street Journal.
  19. News: Sorkin. Andrew Ross. January 23, 2018. Tesla's Elon Musk May Have Boldest Pay Plan in Corporate History. The New York Times. February 17, 2021. February 11, 2021. https://web.archive.org/web/20210211195909/https://www.nytimes.com/2018/01/23/business/dealbook/tesla-elon-musk-pay.html. live.
  20. News: O'Kane. Sean. May 28, 2020. Elon Musk reaches first Tesla compensation award worth nearly $800 million. The Verge. February 17, 2021. February 2, 2021. https://web.archive.org/web/20210202011557/https://www.theverge.com/2020/5/28/21273882/elon-musk-tesla-compensation-plan-stock-award-dollars. live.
  21. News: Browne . Ryan . Elon Musk says he will pay over $11 billion in taxes this year . March 3, 2022 . CNBC . December 20, 2021. https://web.archive.org/web/20221103145815/https://www.cnbc.com/2021/12/20/elon-musk-says-he-will-pay-over-11-billion-in-taxes-this-year.html. November 3, 2022. live.
  22. News: Mangan. Dan. June 8, 2021. Bezos, Buffett, Bloomberg L.P., Musk, Icahn and Soros pay tiny fraction of wealth in income taxes, report reveals. CNBC. June 8, 2021. https://web.archive.org/web/20221005013150/https://www.cnbc.com/2021/06/08/bezos-musk-buffett-bloomberg-icahn-and-soros-pay-little-in-taxes.html. October 5, 2022. live.
  23. News: Pendeleton. Devon. January 6, 2021. Elon Musk Surpasses Jeff Bezos to Become World's Richest Person . Bloomberg L.P.. February 17, 2021. https://web.archive.org/web/20210106191553/https://www.bloomberg.com/news/articles/2021-01-06/musk-close-to-surpassing-bezos-as-world-s-richest-person. January 6, 2021. live.
  24. News: Higgins. Tim. May 8, 2020. Elon Musk, Tech's Cash-Poor Billionaire. The Wall Street Journal. February 17, 2021. live. February 16, 2021. https://web.archive.org/web/20210216200534/https://www.wsj.com/articles/elon-musk-techs-cash-poor-billionaire-11588967043.
  25. News: Woodward. Alex. March 22, 2021. Bernie Sanders responds to Elon Musk's space travel plans with call for progressive taxes. The Independent . live . April 13, 2021. April 13, 2021. https://web.archive.org/web/20210413233021/https://www.independent.co.uk/news/world/americas/us-politics/bernie-sanders-elon-musk-space-b1820744.html.

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