SpaceX founder and Tesla CEO Elon Musk holds a helmet as he visits the development website of Tesla’s gigafactory in Gruenheide, close to Berlin, Germany, May 17, 2021.
Michele Tantussi | Reuters
Elon Musk unleashed a torrent of inventory gross sales, choices workouts, tax fee gross sales and gifted shares final year totaling practically $22 billion. Yet even after unloading a lot Tesla inventory, he still owns a bigger share of the corporate, because of his compensation bundle.
Musk bought $16 billion in shares final year and, in accordance with a submitting with the Securities and Exchange Commission Monday, gifted 5 million shares, value practically $6 billion, to an undisclosed charity or recipient in November. The gross sales and items carry his whole to about $22 billion — a mixture of tax funds, money in his pocket and the present.
Yet as a result of of the character of the choices workouts, Musk really completed the year with a bigger possession stake — and more shares — in Tesla. In 2012, Musk was awarded choices on 22.8 million shares, value about $28 billion final fall when he began promoting.
The approach the choices workouts work is that Musk first began changing the 22.8 million choices into shares. The choices had a strike value of solely $6.24, so he might pay $6.24 for every choice and get a share of Tesla inventory, which have been buying and selling at more than $1,000 final fall.
With every choices conversion, he would simultaneously sell shares to pay the taxes, because the choices are taxed as revenue. Even as he was unloading billions of {dollars} value of shares to pay the taxes, he was accumulating an excellent bigger quantity of inventory on the low choices value — thus growing his possession of the corporate.
In whole, Musk bought 15.7 million shares for $16.4 billion. Add to that the gifted shares, and he unloaded a whole of 20.7 million shares. Yet he gained 22.8 million shares via the choices train — leaving him with 2 million more shares in Tesla on the finish of the year. He at the moment owns 172.6 million shares, giving him a 17% stake within the firm, making him far and away the only largest particular person shareholder.
Musk kicked off his share activity with a poll on Nov. 6, telling his followers “Much is made currently of unrealized positive factors being a means of tax avoidance, so I suggest promoting 10% of my Tesla inventory. Do you help this?” Musk vowed to comply with the outcomes of the ballot, which ended up with 58% in favor of a sale and 42% in opposition to.
In the top, he made good on the promise of promoting 10% of his stake. But he gained even more again with choices — giving him a round-trip-stock journey that left him with billions in money, the biggest single tax fee in U.S. historical past and even more Tesla shares.
Musk’s possession — and $227 billion fortune — is prone to skyrocket once more sooner or later. His subsequent massive pay bundle, which could possibly be even bigger than the 2012 award, expires in 2028.