No salary is too small for the chief executives of some of the biggest corporations - at least the cash portion of it.
Tesla Motors Inc. CEO Elon Musk received a total cash salary of $37,584 in 2015, according to a filing on April 15. The amount is consistent with minimum wage requirements in California.
Even though Musk is the biggest shareholder of the electric motor company, his salary is hardly anything compared to the compensation of his equally prominent colleagues that sometimes reach the eight-digit mark.
Musk reportedly did not receive his salary. He made similarly "generous" gestures when he returned all but $1 of his $70,000 salary in 2013 and retained nothing of his $35,360 compensation in 2014.
The Tesla CEO's cash salary is more than amply compensated by his 37.2 million shares, representing a 26.5 percent stake in the car company as of December 31, 2015. The shareholdings are valued at nearly $10 billion based on Friday's closing price.
Tesla's Chief Financial Officer Jason Wheeler, meanwhile, received a salary package of almost $21 million, with $20.9 million in stock option awards and $46,154 in cash. Wheeler is new to Tesla, having joined the company in November 2015, after a stint at Google Inc.
Tesla's Chief Technology Officer JB Straubel got a salary of $250,560 while Vice President for Engineering Doug Field received $306,923 in cash salary and about $2.8 million in stock awards, according to the company's proxy statement.
"Our current compensation programs reflect our startup origins in that they consist primarily of salary and equity awards. Consistent with our historical compensation philosophy, we do not currently provide our senior executive officers with any form of a cash bonus program," the Tesla proxy filing said.
Is It Just For Show?
Varied opinions point to altruism, marketing ploy and tax purposes as reasons why CEOs are willing to receive annual salaries ranging from $1 to the $30,000 to none at all. However, more than all these motives, the reality is that CEOs get so much more perks in humongous compensation packages that dwarf their base salaries.
Why would Mark Zuckerberg of Facebook Inc., Sergey Brin of Google, Jack Dorsey of Twitter, Carl Icahn of Netflix and Larry Page of Google opt for just $1 a year, yet afford to live in abundance?
CEOs aren't really "working for free," but working hard to protect their investments and continually find ways to raise the value of their companies' stocks.
Moreover, aside from stock options, they receive other perks like the free use of company resources while working, comprehensive insurance plans, executive retirement plans, annual bonuses and other long-term incentive payments for excellent performance. This brings to light a Harvard Business Review article that it's not how much CEOs are paid but how they are paid.
Tesla announced that reservations for the Model 3 has reached more than 325,000 as of the first week of April, estimated to bring in about $14 billion in revenue.
Photo: Steve Jurvetson | Flickr
