Tesla CEO Elon Musk (the richest man in the world) will face more than $ 15 billion in stock taxes in the coming months He sells his shares in the company This year most likely regardless of the Twitter platform vote.
Musk asked his 62.7 million Twitter followers if he should sell 10% of his Tesla stock.
“Lots of unrealized gains have been made lately as a way to avoid taxes,” he said. Consequently, I propose to sell 10% of my shares in Tesla.
Tesla’s CEO has made it clear that he is committed to the results of this poll, no matter what. The results were 58% in favor of the sale and 42% against, indicating that it could sell shares.
Regardless of the survey results, Musk is likely to start selling millions of shares this quarter, due to impending taxes of over $ 15 billion.
Elon Musk acquired the shares in 2012 as part of a compensation plan. And since he doesn’t get a salary or a bonus in money, his wealth comes from stocks and gains in the Tesla stock price.
In 2012, it acquired 22.8 million shares at an execution price of $ 6.24 per share. Tesla’s stock closed at $ 1,222 on Friday, meaning its gain on total stock is just under $ 28 billion.
The company also recently revealed that Musk has taken out loans using his stock as collateral, and with the sales, Musk may want to pay off some of these loan obligations.
Tesla noted in a filing of the Securities and Exchange Commission for the third quarter of questyear: if the price of our common stock falls in significantly, Musk could be forced by one or more banking institutions to sell his common stock to meet his loan obligations if he cannot do so through other means. Any such sale may result in a further decrease in the price of our common stock.
The shares expire in August next year. However, Musk is required to pay income tax on the earnings.
Since shares are taxed as employee benefits or compensation, they are taxed at the highest levels of ordinary income, which is 37% plus 3.8% net investment tax.
Musk must also pay the higher tax rate of 13.3% in California since he was granted and mostly earned stock when he was a tax resident in California.
The combined federal and state tax rate is 54.1%. As a result, total taxes, at the current rate, are $ 15 billion.
“I have a lot of stock that expire early next year,” Musk said in September. As a result, a huge batch of them sold out in the fourth quarter, because I have to do it or they expire.
Musk could take in lending more for its Tesla shares, which now amount to over $ 200 billion. However, it has pledged 92 million shares to lenders for loans in cash.
Musk continues to acquire shares in in excess of those granted through Tesla’s 2012 salary package. In March 2018, Tesla’s Board of Directors awarded him a CEO Performance Award consisting of 101.3 million shares.
Musk owns 170.49 million Tesla shares, as well as a number of stocks option. Since Tesla’s emergence in 2010, Musk has only sold stock twice.
In 2016, it sold 2.7 million shares for a total of $ 593 million to cover taxes. In July 2010, when Tesla’s initial public offering took place, Musk sold just over 1.4 million shares for a total of $ 24 million before tax.
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