Elon Musk To Pay $11 Billion In Taxes After Selling Tesla Stocks
As of Tuesday, Elon Musk has finished trading his shares of Tesla and is walking out with a staggering $11 billion tax bill to show for it. He claims that this bill is the largest individual tax bill in history.
This is a huge jump from previous years, as a ProPublica report showed that Musk, along with other billionaires such as Jeff Bezos and Michael Bloomberg, paid $0 in income taxes in 2018.
This was in part due to the fact that Musk actually doesn’t earn any cash salaries or bonuses as CEO of Tesla. He was instead paid approximately 25 million Tesla stock options and vested 22.9 million of those over subsequent years as Tesla reached certain financial milestones.
Musk didn’t have to pay any taxes on these options until they were used to buy or sell stocks, which he began doing in November as they were slated to expire in August 2022. Musk sold a total of 15.7 million shares between those received by exercising options, and separate shares he held in a trust that represented about 5 million of that total.
He also purchased additional shares for a nominal $6.24 a share. Despite letting go of some of his holdings and footing a huge tax bill, Must now owns 4% more shares in Tesla than he did previously. And even though he has gone through his 2012 options, Musk has 59 million options from his 2018 pay package that won’t expire until 2028.
While he hasn’t quite sold 10% of his prior shares as he promised to after tweeting out a poll to his followers, Musk still attracted significant media attention by publicly discussing his trading strategies.
Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock.
Do you support this?
— Elon Musk (@elonmusk) November 6, 2021
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