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Between summer vacations and going to the beach and having the hot girl or guy summer of your dreams,
season can be a little hard on our wallets. A Chime checking account helps you reach your financial goals while still enjoying the summer. You can take back your finances with features like fee-free overdraft up to $200 with SpotMe or getting paid up to two days early with direct deposit. Learn more at Chime.com slash MNN. And you know I hate overdrafted fees. One time I overdrafted buying a latte, which was so embarrassing at the time, but hey, it happens
it happens to the best of us. And I got charged 35 bucks for a $7 latte. But Chime allows you to overdraft up to $200 with no fees, and you can get temporarily increased overdraft limits with boosts from friends. Live it up this summer and make progress toward your financial goals with Chime. Open your account in minutes at Chime.com slash MNN. That's Chime.com slash MNN. Chime.
Feels like progress.
Professional investors like Ray Dalio and Warren Buffett are in agreement. Bonds are an important part of a healthy financial diet. And the legit only place I buy bonds, this is 100% true, you can totally check my account, is public. The modern brokerage for investors looking to build an awesome multi-asset portfolio.
And a quick moment of humility here. I have been trying to work with Public for years now and low-key stock them because I am such an avid Public user and every other app or site I've tried to buy bonds on has actually made me want to rip my hair out. Public is so easy to use and has thousands of bonds to choose from and not just US treasuries, but corporate bonds too, like for the magnificent seven stocks like Apple, Beta, and Nvidia.
And you can use public for more than your bond investments. On public, you can find all other major financial food groups, stocks, ETFs, high yield cash accounts, options, and even music royalties. If you're looking for a simple yet sophisticated investing experience, go to public.com slash money rehab. One more time, because trust me, you will thank me. It is public.com slash money rehab. This is a paid endorsement for public investing. Full disclosures and conditions can be found in the podcast description.
Hey, money rehabbers, I'm going to be putting together a few totally anonymous surveys over the next couple months, and I would love to hear from you. The first one is up now at moneynewsnetwork.com slash survey. I would so appreciate it from the bottom of my heart if you could take a few minutes and take this survey. I promise it's short. And let me know your thoughts. Thank you. Thank you. Thank you. I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand. It's time for some money rehab. You have.
He did it, guys. Elon Musk got his historic pay package thanks to Tesla shareholders who voted to award Elon the largest compensation package in history. And in the hierarchy of comp packages, Elon is truly in a league of his own. He's not first by hair as determined by photo finish.
After Elon, the second highest paid exec is Hock Tan, CEO of Broadcom. Tan's compensation is about $161 million. I'll do the math for you. Musk is making as much money from his comp package as 290 Hock Tan's.
Some voices were extremely vocal in encouraging shareholders to vote against Elon Musk's pay package, but if I were voting on it, I would have approved it too. That might sound surprising because you know I am all about financial fairness here, and some people assume the argument here is whether or not it's fair for Elon to get an 11-figure pay package.
But to show my work, we have to dig into what the pay package actually is and what it isn't. What it isn't is salary. It's not like Elon Musk is getting a $47 billion paycheck direct deposited into his bank account. Musk actually doesn't have a salary at Tesla. This compensation package consists of stock options, which is a fun, complicated topic for another episode.
But essentially, stock options give an employee the option to buy a certain number of their company's shares, often at a discounted price. In his compensation package, Musk was given the option to buy 303 million shares of Tesla at 23 bucks a share, which is a significant discount from what it's trading at now, which at the time I'm recording this is over 180 bucks a share.
We know that the name of the game when it comes to investing is that you want to sell a stock for more than you bought it for. Buy low, sell high. The cool thing about stock options is that by getting shares at a discount, you really improve your chances of buying low and selling high. Elon buys a Tesla share for 23 bucks and can sell it for 183 dollars. He just made a 7x profit. Multiply that by 303 million shares and that's a lot of money.
But here's the most important thing to know. You may have seen the narrative around the story feel like this comp package came to be because Elon marched into Tesla and said, I make the rules. I am deciding to add 11 zeros into my bank account because I am CEO and I can't.
But this is not the real story. The comp package was announced by Tesla's comms team all the way back in 2018 when Tesla's market cap was $60 billion. And again, Tesla did not just agree to this eye-boggling figure just because they were feeling generous that day. The comp package was structured around awarding different stock options depending on Musk's ability to hit 28 targets over 10 years.
Twenty eight of those targets, nearly half were market cap targets, with the largest being Tesla's ability to reach a six hundred and fifty billion dollar market cap. And let me do a callback to what I just said five seconds ago. Tesla's market cap was 60 billion dollars at the time this structure was announced.
Beyond market cap, eight targets were tied to earnings and another eight were tied to revenue. These targets were bucketed into groups of goals, and Tesla's leadership agreed that Musk would be awarded 1% of the stock outstanding for each group of goals he achieved, which totals 303 million shares if all 28 targets were met.
Tesla hit $650 billion in market cap four years ago, and he's nearly hit all 28 targets. Let's put it this way. He crossed off enough of the groups of targets that he earned $278 million of the $303 million stock options.
Even though Tesla has been on a bit of unstable footing lately, as I talked about in other episodes, there is absolutely no expert in their right mind who would say that Elon hasn't been an incredible CEO for Tesla. As Barron's put it, quote, the package was essentially Musk's bet on himself. He was betting that he could get Tesla to rise from a valuation of $60 billion to at least $6
$150 billion, a 983% rise while making it profitable over 10 years, end quote. And by the way, he made many people rich along the way. So when it comes to whether or not Elon deserves this comp package, he literally does because he's reached nearly all of the goals that Tesla valued at 303 million shares of the company.
So if this is a question of fairness, I think it wouldn't be fair to not give him the package. In my mind, this would be like if I told you I would give you a car if you came in first for the New York City Marathon and then you trained and trained and trained and you won the whole freaking marathon. And I said, no.
fair. I didn't think you were actually going to do it. So I'm keeping the car. After the results of the vote came through, Tesla stock rallied and some financial analysts are predicting that Tesla stock will continue to rise because the uncertainty around Musk's pay package has been this weight holding down the share price.
It was no secret that if the comp package was not passed, Elon might wind down his time at Tesla. And it was no secret because Elon said as much. And this obviously unnerved shareholders. Most shareholders think Elon Musk is Tesla and Tesla is Elon Musk.
And if you're looking for proof of that, look no further than the 1.76 billion shareholders who voted for Elon to receive the comp package. That's compared to the less than one third 529 million shareholders who voted against Elon receiving the comp package.
With Elon reaffirming his commitment to Tesla after this vote, there's a greater sense of stability now around Tesla, which the stock market loves. One tech analyst says that Tesla could reach 350 bucks a share in the next year or so, which would mean that Elon's comp package might be worth a lot more than $47 billion. And it could even mean that Elon Musk would be the first trillionaire.
And if that makes you mad, don't be mad at Elon because he honestly crushed it. If you want to be mad, be mad at Tesla for offering the $47 billion comp package if he hit all of his goals in the first place. For today's tip, you can take straight to the bank. As an investor, you can vote on things at shareholder meetings. If you invested in Tesla, you could have voted on Elon's comp package too.
Between summer vacations and going to the beach and having the hot girl or guy summer of your dreams,
season can be a little hard on our wallets. A Chime checking account helps you reach your financial goals while still enjoying the summer. You can take back your finances with features like fee-free overdraft up to $200 with SpotMe or getting paid up to two days early with direct deposit. Learn more at Chime.com slash MNN. And you know I hate overdrafted fees. One time I overdrafted buying a latte, which was so embarrassing at the time, but hey, it happened.
That's Chime.com slash MNN. Chime.
Feels like progress.
While you're binging the pod, how about a little bonus tip? As a starting place for your investment allocation that you can, of course, tailor depending on your goals, pros recommend making your bond allocation your age. How about a second bonus tip? When you want to invest in bonds, use Public, the modern brokerage for investors looking for a simple yet sophisticated investing experience.
Public is truly the only place I buy bonds, legit, because every other app or site I've tried to use is so complicated, but on Public, I can buy a bond on my iPhone in less than five minutes. This is a major upgrade because most investing platforms that offer bonds design their user experience before the iPhone was even invented. I'll let that one sink in. And you can use Public for more than your bond investments.
Public is the brokerage I use for all my investing needs, whether I'm looking for stocks, ETFs, a high-yield cash account, options, and other assets, even music royalties. To build the multi-asset portfolio of your dreams, go to public.com slash money rehab. One more time, because trust, you will thank me, public.com slash money rehab. This is a paid endorsement for public investing. Full disclosures and conditions can be found in the podcast description.
Money Rehab is a production of Money News Network. I'm your host, Nicole Lappin. Money Rehab's executive producer is Morgan Lavoie. Our researcher is Emily Holmes.
Do you need some money rehab? And let's be honest, we all do. So email us your money questions, moneyrehab at moneynewsnetwork.com to potentially have your questions answered on the show or even have a one-on-one intervention with me. And follow us on Instagram at Money News and TikTok at Money News Network for exclusive video content. And lastly, thank you. No, seriously, thank you. Thank you for listening and for investing in yourself, which is the most important investment you can make.
Money rehabbers, you have money hidden in your house. Yeah, just hiding there in plain sight. Okay, so I don't mean you have gold bars hidden somewhere in walls, treasure map style, but you do have a money-making opportunity that you're just leaving on the table if you're not hosting on Airbnb. It's one of my all-time favorite side hustles. By hosting your space, you are monetizing what you already own. It doesn't get easier than that. For me, hosting on Airbnb has always been a no-brainer. When I first signed up, I remember thinking to myself, sell
you pay a lot of money for your house. It is time that house returned the favor. And to get real with you for a sec, I felt so much guilt before treating myself on vacation because traveling can be so expensive. But since hosting on Airbnb, I feel zero stress for treating myself to a much needed vacation because having Airbnb guests stay at my house when I'm traveling helps offset the cost of my travel. So it's such a win-win. I mean, if I could do it
you could do it. And your home might be worth more than you think. Find out how much at airbnb.com slash host. Money Rehabbers, you have money hidden in your house. Yeah, just hiding there in plain sight. Okay, so I don't mean you have gold bars hidden somewhere in walls, treasure map style, but you do have a money-making opportunity that you're just leaving on the table if you're not hosting on Airbnb.
It's one of my all-time favorite side hustles. By hosting your space, you are monetizing what you already own. It doesn't get easier than that. For me, hosting on Airbnb has always been a no-brainer. When I first signed up, I remember thinking to myself, "Self, you pay a lot of money for your house.
that house returned the favor. And to get real with you for a sec, I felt so much guilt before treating myself on vacation because traveling can be so expensive. But since hosting on Airbnb, I feel zero stress for treating myself to a much needed vacation because having Airbnb guests stay at my house when I'm traveling helps offset the cost of my travel. So it's such a win-win. I mean, if I could do it, you could do it. And your home might be worth more than you think. Find out how much at airbnb.com slash host.