Elon Musk now has more voting power in Tesla after exercising his stock options. The award stems from his 2018 remuneration package.
The world’s richest man filed a Form 4 with the Securities and Exchange Commission (SEC) to disclose a change in Tesla stock ownership. The shares total 303,960,630 units and were transferred on June 16th.
The shares are worth about $116 billion at $381.52 per unit.
Transaction fees were covered by 17,531,857 shares.
The Tesla board approved a massive performance-based pay package for Musk in March 2018. There has been litigation tied to the compensation plan, with a Delaware court voiding it early in 2024 on the grounds that the board was heavily influenced by Musk.
However, the decision was rescinded by the Delaware Supreme Court nearly two years later. The board signed off on the delivery of the shares on April 21, paving the way for Musk to receive his entitlement.
While the latest tranche of shares is restricted and cannot be sold until 2033, Musk has other strategic benefits. His interest in Tesla now gives him 20 percent voting power in the automaker, and could trigger a merger with SpaceX.
The space exploration company recently went public, making a stock-for-stock merger possible.
The two Musk-controlled companies have been interconnected. Tesla made a $2 billion investment in xAI before the former merged with SpaceX, and both companies are jointly developing a chip-production facility named TERAFAB.
Meanwhile, Musk’s latest income will trigger another massive tax bill. As the compensation is treated as ordinary income rather than capital gains, Musk could be on the hook for about $45 billion at the federal tax rate of 37 percent, plus other applicable taxes.
This, however, pales in comparison with Musk’s new proposed $1 trillion salary.
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