One of the world's wealthiest people on the planet, Tesla CEO Elon Musk received $0 in the year 2020. Musk has not accepted his paychecks in years. Where do Musk's earnings go?

Elon Musk Earns Zero Dollars from Tesla for the Year 2020

With a net worth of $186.7 billion, Tesla CEO Elon Musk is one of the richest people on the planet. The electric vehicle company's filing revealed that the CEO received $0 in pay in the year 2020. This is not the first time Musk received no base pay, though.

According to MSN, Musk has requested not to receive his base salary since 2019, which the company granted and so his earning and accrual of his base salary was eliminated. Tesla reported that Musk would have earned $23,760 had he received California's minimum wage for 2019.

What Musk has opted for instead, is an options package that allows him to have his earnings be in the form of stock instead of cash. This was proposed back in 2018 and was approved by the shareholders, said CNN.

The 10-year agreement included 16 operational milestones, Business Insider said. Musk's shares will vest on schedule if Tesla hits 12 of the 16 milestones, and Tesla's market cap hits $650 billion.

With the compensation agreement, the CEO is eligible for options to buy up to 101 million split-adjusted shares of stock at an exercise price of $70.01 each. The shares are being distributed in 12 equal tranches of 8.4 million options, based on the company hitting both financial milestones and achieving certain stock valuation targets, MSN explained.

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Elon Musk's Stocks Earnings

With Musk's entire salary from Tesla in shares of stock, those stocks are worth $21.9 billion today, reflective of last week's close.

Tesla's stock targets were all easily achieved during the year 2020, with its market company surging past $650 billion. The electronic vehicle company's shares skyrocketed to 743 percent, achieving the status of being the best performing US stock and is considered the most valuable automaker on the planet, MSN said.

Though the financial milestones were somewhat harder to achieve in 2020, four of Musk's stock tranches afforded him the right to buy 33.8 million shares at a total of $2.4 billion as its exercise price.

In 2021, the company has hit two more financial milestones and that makes Musk qualified to earn an additional 16.9 million stock options, worth $10.9 billion with today's prices.

The company is set to hit three other milestones in the near term, giving Musks' options more opportunity to grow.

Musk has not sold any of his stock options, saying "Only time I sell Tesla stock is when my stock options are expiring & I have no choice," in a tweet in June. Currently, Musk has control over 23 percent of the company's stock.

His choice to not receive a cash salary has led him to open quite a credit line, with 88 million of his Tesla shares pledged as collateral for personal debts, according to the filing. Those 88 million shares are worth $63 billion today. A company disclosure has updated that the number of shares pledged as collateral has been reduced by 4 million shares since.

Musk's opting for the stock options is all towards the goal to "help pay for humanity to get to Mars in 10 to 20 years," he said on Twitter last November 2020.

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