Business Standard

Elon Musk's $56 billion pay package more than Tata Motors' annual revenue

Elon Musk's pay packaged vs Indian firm revenues: Elon Musk's annual salary is more than Tata Motors' revenue but less than Reliance Industries

Elon Musk, Tesla

Photo: Bloomberg

Vasudha Mukherjee New Delhi
Tesla shareholders last week approved CEO Elon Musk’s $56 billion remuneration package for the second time at a crucial annual shareholder meeting. This approval follows a previous invalidation by a Delaware court earlier this year. The staggering sum of Musk’s compensation exceeds the total revenue of Tata Motors, which reported $52.44 billion (Rs 4.38 trillion) in revenue, according to a report by The Economic Times.

Tata Motors FY24 earnings

For the financial year 2023-2024 (FY24), Tata Motors reported record revenues of Rs 4,37,900 crore ($52.44 billion), an all-time high Ebitda at Rs 62,800 crore ($7.52 billion), and a net profit of Rs 31,800 crore ($3.8 billion). In Q4 FY24, the company posted revenues of Rs 1.20 trillion, marking a 13.3 per cent year-on-year increase. The consolidated net profit for the quarter ending March 31, 2024, reached Rs 17,529 crore, a 46 per cent jump from the Rs 12,033 crore reported in the same period the previous year. 

Elon Musk’s pay package vs Indian firm revenues

The Tesla chief’s compensation package not only surpasses Tata Motors but also eclipses the total revenues of other significant Indian entities, including:

- Hindustan Petroleum Corporation Ltd (HPCL) > $52.09 billion
- State Bank of India (SBI) > $40.35 billion
- Tata Consultancy Services (TCS) > $29.04 billion

However, it falls short when compared to the revenues of:
- Reliance Industries Ltd (RIL) > $108.62 billion
- Life Insurance Corporation of India (LIC) > $96.10 billion
- Indian Oil Corporation (IOC) > $93.84 billion
- Oil and Natural Gas Corporation (ONGC) > $77.54 billion

Elon Musk is presently the highest-paid CEOs in the world. According to data analysed for The Associated Press by Equilar, the media package for S&P 500 US CEO in 2023 was $16.3 million. This makes the Tesla CEO’s earnings at least 250 times greater, which was the same conclusion drawn by Delaware Chancellor Kathaleen St Jude McCormack, who struck down the package in January 2024.

According to CEOWORLD magazine, here are the top five highest paid CEOs in the world and their earnings in 2023:

1. Sundar Pichai (Alphabet): Sundar Pichai, the CEO of Alphabet, received a total compensation package valued at approximately $226 million. This included his annual salary of $2 million, security costs of $6 million, and stock awards amounting to $218 million.

2. Hock Tan (Broadcom): Hock Tan, the CEO of Broadcom, was awarded a total compensation package of around $161.83 million, driven largely by long-term equity awards.

3. Nikesh Arora (Palo Alto Networks): Nikesh Arora, CEO of Palo Alto Networks, received a total compensation of $151.43 million, marking a significant increase due to stock awards and incentives.

4. Sue Y Nabi (Coty Inc): Sue Y Nabi, the CEO of Coty Inc., earned a total compensation package of approximately $149.43 million, reflecting substantial growth in her remuneration.

5. Christopher Winfrey (Charter Communications): Christopher Winfrey, CEO of Charter Communications, received total compensation of $89.08 million.

Elon Musk’s pay package and legal troubles

Elon Musk’s pay package, originally approved by investors in 2018, was struck down by a Delaware judge earlier this year. However, at the company’s annual shareholder meeting on Thursday, the proposal was approved as a resolution, potentially aiding the board in its legal battle against the court order.

Even with shareholder approval, legal experts remain uncertain whether it will be sufficient to overturn the Delaware court’s decision. Tesla’s regulatory filing in April indicated that shareholder backing might resolve the issue, especially after the court criticised the company for failing to disclose important details to shareholders.
Tesla’s lawyers are scheduled to meet with the court in July.

Tesla shareholder stance on Musk’s salary

On Thursday, ahead of the final shareholder tally after Musk announced on X (formerly Twitter) that both the compensation and incorporation resolutions were on the way to ‘passing by a wide margin’.

Musk faced opposition from some of its significant shareholders, such as  Norway’s $1.7 trillion sovereign wealth fund, which owns 31.57 million Tesla shares, as well as the California Public Employees' Retirement System, which holds 9.5 million shares.

The proposal, however, saw support from Baron Capital, holding 17.22 million shares, with founder Ron Baron stating in an open letter that ‘Tesla is better with Elon. Tesla is Elon’.

Ahead of the shareholders’ vote, media reports indicated that there were concerns that rejection of the compensation proposal could harm Tesla’s stock price. Additionally, Musk had previously indicated he might continue his AI initiatives at other companies if the award was rejected, raising fears he might leave Tesla altogether.

Tesla shares saw a slight increase of 0.1 per cent to $182.70 in extended trading on Thursday. Despite this, the stock has lost about a quarter of its value so far in 2024. The approval of Musk’s compensation package and the move to Texas mark significant developments for Tesla as it navigates financial challenges and a shifting regulatory landscape.

(With inputs from agencies)

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Jun 18 2024 | 4:57 PM IST

Explore News