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Elon Musk’s Pay Package More Than Maruti Suzuki Market Cap

24 April 20245 mins read by Angel One
What do you think? Is Elon Musk's USD 56 billion payday justified, or does it raise more questions than answers? Back in 2018, he would be rewarded based on Tesla's performance.
Elon Musk’s Pay Package More Than Maruti Suzuki Market Cap
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Elon Musk is no stranger to making headlines, but this time it’s not about rockets or electric cars. The Tesla CEO recently postponed his much-anticipated trip to India, citing “very heavy Tesla obligations.” However, the timing is curious, given that Tesla is about to announce its quarterly results, addressing challenges like competitive pressure from Chinese EV manufacturers and falling Tesla sales. But that’s not all. Elon Musk’s postponed trip isn’t the only reason he’s in the spotlight—it’s his pay package. And it’s worth a whopping USD 56 billion.

The Biggest Payday in History

Yes, you read that right: USD 56 billion. To put it in perspective, that’s larger than the market cap of Maruti Suzuki India, one of India’s biggest car manufacturers. If approved, it would be the biggest payday in U.S. history. So, how did this all come about? Back in 2018, Elon Musk proposed an unconventional compensation plan: he would not draw a salary or a bonus from Tesla. Instead, he would be rewarded based on Tesla’s performance.

A Performance-Based Compensation Plan

Under this plan, shareholders set 12 different targets for Tesla. Each time one of those targets was met, Musk would earn more Tesla stock, around 1% of the company’s value. If all targets were met, Musk’s payday could be USD 56 billion over several years. But even in 2018, some shareholders raised eyebrows, questioning whether these targets were genuinely challenging or just a way to justify Musk’s massive payout. A court in Delaware agreed, invalidating the pay deal, stating that shareholders might not have been properly consulted. However, the deal is back on the table, and Tesla shareholders will vote again in June.

Tesla’s Challenges

The timing of Musk’s postponed trip and the vote on his pay package couldn’t be more interesting. Tesla is facing significant challenges. The company’s stock price has plummeted 41.2% on a year-to-date basis. In the last six months, it has declined by 32.24%, and in the last month alone, it’s down by 15%. Adding to these woes, Tesla recently lost its crown as the top electric vehicle producer, with China’s BYD overtaking them.

Then there’s the matter of recalls—Tesla had to recall 360,000 cars due to safety concerns with its self-driving feature. To make matters worse, Tesla is laying off 10% of its global workforce, roughly 14,000 jobs. Yet despite all these challenges, Elon Musk could still walk away with a massive payday.

The Ethical Dilemma

This brings us to the big question: Is a USD 56 billion pay package justified for Tesla’s CEO, especially given the company’s recent performance and layoffs? CEOs at S&P 500 companies make an average of USD 14.8 million a year. Yet for the average worker, it would take about 185 years to earn that kind of money. This kind of pay disparity raises ethical questions, especially when job cuts are happening simultaneously with record-breaking executive pay.


Elon Musk’s USD 56 billion payday is under scrutiny, and for a good reason. While performance-based compensation is a common practice, the sheer size of this payout raises questions about fairness and corporate governance. Given Tesla’s recent struggles and the growing gap between executive and worker pay, the justification for this astronomical pay package is questionable.

The question we need to ask is whether the value Elon Musk brings to Tesla justifies the staggering price of his compensation package.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.

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