Despite Estimated $23.5 Billion Net Worth, Elon Musk Reportedly Says He's Low on Cash: 'Financially Illiquid'
Despite an estimated net worth of $23.5 billion, entrepreneur Elon Musk reportedly claims he’s low on cash, though this could be due to the fact that his financial interests are tied up in shares of two of his companies — Tesla and SpaceX.
Musk is currently facing a defamation lawsuit over an incident last year in which he called a British diver a “pedo guy” on Twitter.
In a court filing last month, an attorney for the diver, Vernon Unsworth, referred to “Musk’s sworn testimony that he is financially illiquid,” according to Bloomberg.
This does not necessarily mean that Musk is poor. Rather, his reported cash issues are likely a result of him taking stock options in the companies that he runs in lieu of normal salaries.
With that in mind, selling off his shares in those companies would not be possible overnight.
In 2018, Musk earned nearly $2.3 billion with Tesla, yet the books technically say he made zero dollars in cash compensation, according to The New York Times.
“Under the terms of Musk’s compensation agreement with the electric-car maker, the CEO will earn a massive payday once the company achieves some stunning stock-price and financial goals,” Business Insider reported.
While some of those revenue goals have been achieved, the stock objectives have not, and earning reports set to be released Wednesday will show just how far Musk is away from his future payday.
The way Musk’s pay is calculated is determined by the Securities and Exchange Commission’s rules for reporting CEO compensation.
A Tesla representative, meanwhile, provided a statement to Business Insider commenting on Musk’s compensation.
“Elon actually earned $0 in total compensation from Tesla in 2018, and any reporting otherwise is incorrect and misleading. Unlike other CEOs, Elon receives no salary, no cash bonuses, and no equity that simply vests by the passage of time,” the statement said.
“His only compensation is a completely at-risk performance award that was specifically designed with ambitious milestones, such as doubling Tesla’s current market capitalization from approximately $40 billion to $100 billion,” it continued.
“As a result, Elon’s entire compensation is directly tied to the long-term success of Tesla and its shareholders, and none of the equity from his 2018 performance package has vested.”
According to Tesla’s 2019 proxy statement, Musk was set to receive for his 2018 compensation: a “10-year maximum term stock option to purchase 20,264,042 shares of Tesla’s common stock, divided equally among 12 separate tranches that are each equivalent to 1% of the issued and outstanding shares of Tesla’s common stock.”
Musk has been quieter than usual on social media these days.
Going offline for a few days
— Elon Musk (@elonmusk) October 17, 2019
“Going offline for a few days,” he tweeted Thursday.
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