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| Elon Musk faces $15 billion in taxes |
Tesla CEO Elon Musk will have to pay more than $15 billion in stock taxes over the next few months, which could prompt him to sell his company shares regardless of this year's Twitter vote.
Musk asked his 62.7 million Twitter followers if he should sell his 10% stake to Tesla.
"Recently there has been a lot of unrealized gains for tax avoidance," he said. So I suggest selling my 10% stake in Tesla.
The Tesla CEO has made it clear that he is certainly committed to the results of this investigation. The result was that 58% of people supported the sale and 42% were against it, indicating that he could sell the stock.
Regardless of the results, Musk could begin selling millions of shares this quarter due to the imminent imposition of more than $15 billion.
As part of the compensation plan, Elon Musk acquired these shares in 2012. As he does not receive a salary or a cash bonus, his fortune comes from the increase in shares and the price of Tesla's stock.
In 2012, he acquired 22.8 million shares at an execution price of $6.24 per share. Tesla stock closed at $1,222 on Friday, which means total stock income was just under $28 billion.
The company also recently announced that Musk was using its shares as a mortgage and that the sale may hope Musk will pay off some of his loan obligations.
As Tesla noted in Securities and Exchange Commission documents in the third quarter of this year, if our common stock price drops sharply, one or more banking institutions may force Musk to sell his common stock in order to repay his stock. . In another way... these sales could lead to a further decline in our common stock price.
This is the real reason to sell the stock
The class ends in August of next year. However, Musk has to pay income taxes.
Because shares are taxed as bonus or compensation to employees, they are taxed at the highest level of ordinary income, which is 37% plus a net investment tax of 3.8%.
Musk also has to pay the highest California tax rate of 13.3% because he's rewarded for being a California tax resident and it's mostly the shares he earns.
The combined federal and state tax rate is 54.1%. Thus, the total tax revenue at the current tax rate is $15 billion.
"I have a number of shares that are expiring early next year," Musk said in September. As a result, because I have to do it, or else I'll run out in Chapter 4.
Musk can borrow more money to buy Tesla stock, and total Tesla stock now exceeds $200 billion. However, he pledged 92 million shares to the lender for a cash advance.
Musk continued to buy more shares than the 2012 Tesla salary plan granted. In March 2018, the Tesla Board of Directors awarded him the CEO Performance Award for 101.3 million shares.
Musk owns 170.49 million Tesla shares and a number of stock options. Since Tesla debuted in 2010, Musk has sold stock only twice.
In 2016, he sold 2.7 million shares to pay taxes for a total of $593 million. When Tesla went public in July 2010, Musk sold more than 1.4 million shares for a total of $24 million before taxes.