Billionaire Tesla CEO Elon Musk settled fraud charges with the SEC over allegedly "misleading" statements. He'll pay $20 million and step down as chairman for three years.
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| © Provided by CNBC SpaceX founder Elon Musk. |
By Tom Huddleston Jr., CNBC
For multi-billionaire Tesla CEO Elon Musk, paying a $20 million fine is comparable to paying a speeding ticket for the average American.
Over the weekend, Musk reached an agreement with the Securities and Exchange Commission to settle charges of securities fraud against the Tesla CEO, which stemmed from Musk's August tweets claiming that he had secured financing to take the electric auto company private.
Part of what Musk must do is pay a civil penalty of $20 million.
A $20 million fine isn't exactly small change, but it's only a tiny fraction of Musk's overall wealth. As CEO of both Tesla and aerospace company SpaceX, Musk boasts an estimated net worth of $21.2 billion, according to Forbes. That means the $20 million fine represents less than 0.1 percent of Musk's total net worth.
It's still a lot of money, but he can afford it and then some. So, what does paying $20 million feel like to Elon Musk, relative to the average American? Well, the median household net worth in the United States was $97,300 in 2016, according to the Federal Reserve's most recent Survey of Consumer Finances. Taking 0.1 percent of that amount would be $97.30.
So, Musk getting fined $20 million feels like paying a $100 fine for the median American household. That's less than the average cost of a speeding ticket in the United States, which is around $150, according to the insurance company Esurance.
As part of the settlement, Tesla, the company, must also pay a $20 million fine. But of course, it's not just about money. Musk must step down as chairman of Tesla's board for at least three years though he will remain CEO. The SEC had alleged that Musk issued "false and misleading" statements, but the terms of the deal do not require Musk or Tesla to admit any wrongdoing.
The agreement aims to bring more oversight over Musk at Tesla, where the board will add two new independent directors. Tesla's board will have "an obligation to oversee Musk's communications with investors," the SEC said in its press release, in order to avoid new situations where Musk's tweets or statements affect the company's stock price.
For multi-billionaire Tesla CEO Elon Musk, paying a $20 million fine is comparable to paying a speeding ticket for the average American.
Over the weekend, Musk reached an agreement with the Securities and Exchange Commission to settle charges of securities fraud against the Tesla CEO, which stemmed from Musk's August tweets claiming that he had secured financing to take the electric auto company private.
Part of what Musk must do is pay a civil penalty of $20 million.
A $20 million fine isn't exactly small change, but it's only a tiny fraction of Musk's overall wealth. As CEO of both Tesla and aerospace company SpaceX, Musk boasts an estimated net worth of $21.2 billion, according to Forbes. That means the $20 million fine represents less than 0.1 percent of Musk's total net worth.
It's still a lot of money, but he can afford it and then some. So, what does paying $20 million feel like to Elon Musk, relative to the average American? Well, the median household net worth in the United States was $97,300 in 2016, according to the Federal Reserve's most recent Survey of Consumer Finances. Taking 0.1 percent of that amount would be $97.30.
So, Musk getting fined $20 million feels like paying a $100 fine for the median American household. That's less than the average cost of a speeding ticket in the United States, which is around $150, according to the insurance company Esurance.
As part of the settlement, Tesla, the company, must also pay a $20 million fine. But of course, it's not just about money. Musk must step down as chairman of Tesla's board for at least three years though he will remain CEO. The SEC had alleged that Musk issued "false and misleading" statements, but the terms of the deal do not require Musk or Tesla to admit any wrongdoing.
The agreement aims to bring more oversight over Musk at Tesla, where the board will add two new independent directors. Tesla's board will have "an obligation to oversee Musk's communications with investors," the SEC said in its press release, in order to avoid new situations where Musk's tweets or statements affect the company's stock price.
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