Tesla boss Elon Musk has scooped a bonus worth almost £200million – one third of the electric car maker’s entire annual profit.
The award – which helped cement Musk’s position as the world’s richest man – was part of his £40billion bonus plan which doles out shares when the company hits certain targets.
These include growing Tesla’s market capitalisation, which has rocketed by nearly 700 per cent in the past year as investors piled into the stock.
But in its latest set of results, the firm admitted that Musk’s payout and other costs have eaten into profit margins, and are partly responsible for it missing Wall Street forecasts.
The 49-year-old’s £197million bonus was equivalent to 37 per cent of his company’s full-year profit in 2020, the first it has reported.
Tesla made £528million, up significantly from its £631million loss in 2019 but well below the £910million that had been predicted by Wall Street analysts.
Tesla explained that the figure had been reduced by ‘stock-based compensation expense, attributable to the 2018 chief executive award’ in the fourth quarter.
Tesla by the numbers
- £151bn Musk’s wealth
- £197m Bonus last year
- £528m Tesla profit in 2020
- £600bn Tesla’s market value
- 660% Rise in shares in past year
Along with a drop in the prices of its cars, this effectively wiped out the boost to its finances from selling more vehicles and receiving green tax credits, the firm added.
Tesla’s board awarded the lucrative bonus plan to Musk in 2018. Tranches of shares are paid out to the billionaire when Tesla hits certain targets.
In the past year alone, the company’s value has jumped from £75billion to £600billion – all but guaranteeing some payouts from the scheme.
Nicholas Hyett, an analyst at Hargreaves Lansdown, said the profit figure had been ‘some way below’ what Wall Street had hoped for.
He said: ‘An increasingly competitive landscape means Tesla will have to work harder in the future.’
Musk overtook Amazon boss Jeff Bezos to become the world’s richest person earlier this month.
He is worth about £151billion, according to Bloomberg’s billionaires index, up from just £25billion a year ago.
The astonishing rise in fortunes has been driven by Tesla’s soaring share price, with Musk’s wealth primarily drawn from his 18 per cent stake in the business.
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