Source: https://www.linkedin.com/feed/update/urn%3Ali%3Ashare%3A6864718170628919296
#ElonMusk Sells About $5 Billion in #Tesla #Stock: Three days of #share disposals come as the billionaire chief executive exercises a large number of #stock #options: https://lnkd.in/evC6CWut:
Arrival of the #Creator #Economy: Beyond #Intrapreneurs & [ #Digital #Social ] #Entrepreneurs: https://lnkd.in/eUb6Z-ES :
The Tesla CEO, who is compensated in #stock #awards and doesn’t accept a cash salary, faces an August deadline to convert #tens of #millions of #stock #options into #shares or let them #expire #worthless. Thanks to the decline in Tesla’s share price Monday, the CEO’s #tax #bill is likely to be #lower than it would have been if he had exercised his options before the #poll. For example, exercising at Friday’s closing price would have yielded taxable income about 5% higher. Tesla shares fell sharply in the wake of Mr. Musk’s Saturday poll, declining about 5% to $1,162.94 at Monday’s close and almost 12% on Tuesday.
The top #federal #tax #rate on #longterm #capitalgains is 23.8%, though Congress is considering a #surtax that would raise that to 31.8% starting in 2022, giving Mr. Musk and others an incentive to sell before any such change takes effect. That same 8% tax would also apply to his #exercise of #options, giving him a reason to do that now.
The #world’s #richest #person, over the weekend, polled people on #Twitter about whether he should sell 10% of his stockholdings in Tesla and around 58% of respondents supported a sale. Monday’s #option #exercise and #sales were made under a #preset #trading #plan Mr. Musk established on Sept. 14, according to #regulatory #filings, almost two months before he raised the idea of a sale on Twitter. Such trading arrangements, dubbed 10b5-1 plans, are designed to enable company #insiders to sell based on a set #schedule, #price #triggers or other factors without running afoul of #insider #trading #rules. The filings that disclosed the subsequent sales on Tuesday and Wednesday don’t include the same #footnotes about #preset #trading #plans and #tax #withholding #obligations.
He reported selling more than 900,000 shares at prices ranging from $1,135 to about $1,196 on Monday, near #record #highs for #Tesla’s #stock, whose value had increased by more than 70% this year through Friday. The difference between the value when he exercised the #options and the #exercise #price of $6.24 will be #taxable #income to Mr. Musk and likely a #tax #deduction for the company. The #lower the #share #price goes, if he continues to exercise options, the #smaller his #tax #bill will be.
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