Elon Musk Became the First Person Ever Confirmed With a Net Worth Above $1 Trillion in June 2026. Here's Why That Milestone Still Matters for Tesla and SpaceX Shareholders.

When Space Exploration Technologies (NASDAQ: SPCX) went public in June, CEO Elon Musk became the world's first trillionaire thanks to his stake in the company. His net worth has fluctuated quite a bit since then, from as high as $1.45 trillion to below $700 billion. It sits at $983 billion as of Oct. 21, according to Forbes.

Musk's net worth isn't just a vanity metric. For SpaceX and Tesla (NASDAQ: TSLA) shareholders, it's an important number that offers a rough sense of the sentiment toward both tech companies.

Elon Musk: Image source: The White House.

Elon Musk's wealth is tied to SpaceX and Tesla

The vast majority of Musk's wealth comes from his SpaceX and Tesla holdings. Forbes reports that he owns about 38% of SpaceX and nearly 11% of Tesla. This isn't unusual for founders -- Jeff Bezos's wealth is heavily concentrated in Amazon stock, and most of Mark Zuckerberg's wealth is in Meta Platforms stock, to give a few examples.

But while most founders can trim their positions, Musk's stake in SpaceX is locked until June 12, 2027. SpaceX and Tesla are also more volatile and trade at higher valuations than Amazon and Meta, as well as most other large companies by market cap. Tesla trades at about 360 times trailing earnings and SpaceX at 68 times trailing sales.

The bull case here is that Musk has significant personal exposure to the success of his companies, so his interests align with shareholders. However, both companies are also highly reliant on Musk, which adds to their risk. When it comes to SpaceX, Musk also effectively has full control, with about 85% of the voting power because of the company's dual-class voting structure.

While he doesn't have full control at Tesla, Musk recently confirmed that SpaceX and Tesla have formed special committees of independent directors to evaluate a potential merger. If a merger takes place, Musk could end up with enough voting power to control the new company if SpaceX's voting structure carries over.

He has performance-based compensation at both companies

Musk's compensation at SpaceX and Tesla has received considerable attention, particularly his Tesla contract, which is worth up to $1 trillion. Although that pay package attracted criticism, it's far from guaranteed. It's split into 12 tranches, and to earn each one, Musk needs Tesla to hit a market cap milestone and an operational milestone. The market cap milestones go as high as $8.5 trillion, more than five times the company's market cap of about $1.5 trillion.

His SpaceX contract works the same way. It's worth up to $1.1 trillion if SpaceX reaches a $7.5 trillion market cap, colonizes Mars with at least one million inhabitants, and puts data centers in space.

It's extremely unlikely that Musk gets his full compensation packages at either SpaceX or Tesla. But since each one has tranches of stock that unlock with increasingly difficult milestones, he's heavily incentivized to continue building the businesses.

Net worth numbers of the ultrarich are usually more of a piece of trivia than important information. Musk's case is different because of his holdings in SpaceX and Tesla and his compensation packages. His net worth essentially moves with the share prices of those two companies, so if it's going up, that's likely good news for shareholders.

Lyle Daly has positions in Meta Platforms and Tesla. The Motley Fool has positions in and recommends Amazon, Meta Platforms, and Tesla. The Motley Fool has a disclosure policy.