Elon Musk will pay the biggest tax bill in U.S. history this upcoming tax season. This weekend, the Tesla CEO tweeted, unprompted, "For those wondering, I will pay over $11 billion in taxes this year."
Last month, Musk made made waves with a Twitter poll asking his 61 million followers whether he should sell a 10% chunk of his stake in Tesla. The results were strongly in favor of the sale, and over the ensuing weeks Musk sold $14 billion worth of shares in his company.
But there's another reason why Musk needed to start selling shares: stock options. The world's richest man — whose net worth currently stands at $243 billion, according to Bloomberg — needed to sell shares to pay off a major tax bill that he is incurring by exercising stock options.
In 2012, Musk was awarded Tesla stock options that allowed him to buy 22.8 million shares at $6.24 per share. Those options expire next year, giving Musk a limited window to take advantage. As of last week, Musk has exercised the right to buy millions of shares. Tesla is trading at $904 per share as of Monday morning.
Now, Musk will need to pay taxes on the difference between the 2012 and 2021 stock prices at a rate of more than 50%. The tax bill "over $11 billion" is close to the $12 billion figure projected by CNBC's Robert Frank last week.
The SEC filings detailing a number of Musk's sales said that they were made "solely to satisfy [Musk's] tax withholding obligations related to the exercise of stock options."
Shares of Tesla were down 3% Monday morning, but the electric automaker is still having a strong year. The company is up roughly 25% year to date, and earlier this year became just the sixth company ever to reach a $1 trillion market cap. Tesla's market cap currently sits just over $900 billion.
Musk is still the world's richest person by a wide margin, and has seen his net worth grow by more than $87 billion in 2021. Earlier this year, his net worth was as high as $340 billion.
For comparison's sake, the world's second-wealthiest person, Jeff Bezos, is currently worth $195 billion. Bill Gates, the world's fourth-richest person, is worth $135 billion.
This story has been updated to include Musk's reported tax bill.