Elon Musk has become the richest man in the world, surpassing the previous record holder Jeff Bezos. according to CNBC. Musk is now worth more than $ 180 billion.
Musk’s soaring wealth reflects the meteoric rise in Tesla’s stock. The company’s share price closed at $ 816 on Thursday, up nearly 8 percent for the day. That stock price values Tesla at nearly $ 800 billion – several times more than any other automotive company.
According to CNBC, Musk’s rise to become the richest man in the world is the fastest in history. At the start of 2020, a little over a year ago, Musk was worth just $ 27 billion. At the time, Tesla stock was trading for less than $ 100 (adjusted for a Share split 2020).
The stock rose to over $ 700 in the course of 2020. Then in the first week of 2021 it rose above $ 800.
Big paydays ahead
Musk will get even richer in the years to come if he’s able to grow Tesla’s sales and profits. A risky but generous one Pay package Approved by shareholders in 2018, Musk will offer up to 12 stock options if Tesla hits certain milestones for the company’s valuation, sales and profits. So far, Musk qualified for four of the 12 payouts.
To get the initial payout, Tesla’s shares had to rise to $ 100 billion and Tesla had to hit a certain threshold of sales or profit. Musk was eligible for a second payout when Tesla hit $ 150 billion – again along with a revenue or profit target. That process will continue through the 12th payout, which Musk will qualify for, when Tesla’s market value increases to $ 650 billion and Tesla hits higher revenue and profit targets.
The revenue and profit rules are a bit complicated, but for example, Musk will receive all 12 awards if Tesla has $ 175 billion in revenue and $ 6 billion in profit over a year. Between the fourth quarter of 2019 and the third quarter of 2020, Tesla had sales of $ 28 billion and profits of $ 550 million. So Tesla has to grow significantly before Musk gets all of these payments.
If he qualifies for these payouts, they will add significantly to Musk’s wealth. Each option award entitles Musk to purchase 1 percent of Tesla stock at a greatly reduced price. So if Musk gets all eight of the remaining awards, it will add tens of billion dollars to his net worth.
It is not a mystery how Musk intends to use his enormous wealth: He is determined to send people to Mars. His other company, SpaceX, is working hard on development Spaceship, a rocket built to enable interplanetary travel. Starship was designed to drastically reduce the cost of moving people and cargo into space and between planets – perhaps enough that someone with a net worth of more than $ 200 billion could personally fund a major Mars program.