Everything about <a href="https://www.forbes.com/profile/elon-musk/" target="_blank" rel="noopener noreferrer">Elon Musk</a> is larger than life these days, so it’s fitting that the <a href="http://ir.tesla.com/releasedetail.cfm?ReleaseID=1054948" target="_blank" rel="noopener noreferrer">new compensation package</a> for Tesla’s visionary billionaire leader is equally audacious. It may also help should the company move to raise more funds this year to pay for Musk’s <a href="https://www.forbes.com/sites/alanohnsman/2017/11/17/elon-musks-10-ton-challenge-turning-tesla-into-a-semi-truck-powerhouse/" target="_blank" rel="noopener noreferrer">ever-expanding list of aspirations</a>.
The package locks up Musk as either CEO or executive chairman and chief product officer for 10 years, with the sole compensation consisting of stock options that would be granted only if the company meets a series of performance goals. Among the most ambitious of them: Tesla’s market capitalization would have to ultimately swell to $650 billion, or about 11 times its current $59.4 billion level. Over the next decade, revenue from Tesla’s electric vehicles, batteries and solar panels has to reach an annual $175 billion, more than 10 times the likely level in 2017. There are no production volume goals, as was the case with his previous 2012 long-term compensation plan, though pre-tax earnings excluding certain items have to reach $14 billion to receive the maximum benefit.
Should all of that happen, Musk would be compensated with stock options equal to 1% of Tesla&#8217;s current outstanding shares, delivered over 12 tranches. It would expand his wealth by tens of billions of dollars, from <a href="https://www.forbes.com/profile/elon-musk/" target="_blank" rel="noopener noreferrer">Forbes’ estimate of $21 billion</a> currently. The plan needs approval from Tesla shareholders, though given the faith so many of them place in Musk’s leadership, that seems likely to be a formality.
Certainly, if all the targets are met, it will be a remarkable accomplishment and worthy of remarkable compensation. A review of the package by <a href="https://www.nytimes.com/2018/01/23/business/dealbook/tesla-elon-musk-pay.html?rref=collection%2Fsectioncollection%2Fbusiness&amp;action=click&amp;contentCollection=business&amp;region=rank&amp;module=package&amp;version=highlights&amp;contentPlacement=1&amp;pgtype=sectionfront" target="_blank" rel="noopener noreferrer">The New York Times</a> called it the “boldest pay plan in corporate history.” Not to be outdone, Musk himself told the paper: “I actually see the potential for Tesla to become a trillion-dollar company within a 10-year period.”
<a href="http://www.forbesafrica.com/billionaires/2017/11/03/roadblock-elon-musks-net-worth-drops-800-million-day-amid-tesla-woes/" target="_blank" rel="noopener">READ MORE: Roadblock: Elon Musk&#8217;s Net Worth Drops $800 Million In A Day</a>
When Musk&#8217;s previous compensation plan was approved in 2012, the goals for the young company looked similarly audacious. At the time, it was not a foregone conclusion that the company that was just beginning to roll out its Model S sedan would be able to grow its market cap at the time from just over $3 billion by annual $4 billion increments. In fact, that happened even faster than anticipated, with its value swelling to nearly $60 billion. And of the targets Musk was to achieve in the original comp plan, including launching the Model X crossover and Model 3 sedan and aggregate production of 300,000 vehicles, at least nine of 10 have been met, according to the company.
So what’s the significance of this announcement right now, particularly given that Musk has given no indications that he’s considering stepping away from Tesla? Certainly, the news that he’s staying put, even in the event that he opts to relinquish CEO duties to a handpicked successor, will cheer his remarkably loyal owners and long-term investors. It also helps the company compete for talent, particularly as the role of technology companies in the area of next-generation transportation expands.
“The timing precedes what we expect to be an unprecedented era in the battle for capital and human talent,” Adam Jonas, an equity analyst for Morgan Stanley, said in a research note about the compensation plan.
“For much of Tesla&#8217;s history as a public company, the company has all but monopolized the OEM investment debate for Auto 2.0,” Jonas said. “Over the next 12 months, we anticipate that Tesla&#8217;s scarcity value amongst entities vying for supremacy in the new ecosystem will be challenged.”
<a href="http://www.forbesafrica.com/homepage/2017/07/07/tesla-loses-valuable-u-s-carmaker-crown-stock-takes-12-billion-hit/" target="_blank" rel="noopener">READ MORE: Tesla Loses &#8216;Most Valuable US Carmaker&#8217; Crown</a>
And much like Musk’s over-the-top Tesla Semi and Roadster debuts late last year, turning attention to hopes for the future and away from current challenges – namely the struggle to achieve high-volume production of Tesla’s first (almost) mass-market car, the Model 3 – the sky-high performance goals keep the excitement for the brand very high. That’s important right now as soon-to-be-announced financial results for 2017’s fourth quarter, much like Tesla’s production results this month, may hold less to cheer about.
And if, as some analysts expect, Tesla issues new debt or stock for the ongoing expansion of its vehicle and manufacturing operations, development of new cars and trucks, an ever-larger global network of electric charging and vehicle maintenance facilities, it helps to have the brand’s symbol staying put.
Barclays equity analyst Brian Johnson estimated this month that Tesla will likely raise a further $2.5 billion this year, though probably not until the second half when, presumably, Model 3 production headaches are resolved or on their way to being solved.
Ultimately, the compensation package shows that eight years into its life as a public company that has become iconic, if not profitable, Tesla has no shortage of astonishing aspirations. And, of course, that the person who embodies, sets and guides those aspirations is sticking around for many years to come. &#8211; Written by <a href="https://www.forbes.com/sites/alanohnsman/" target="_blank" rel="noopener" data-ga-track="contrib block byline">Alan Ohnsman</a>, FORBES STAFF

Musk’s Multi-Billion-Dollar Tesla Comp Plan Is Shrewd Marketing Amid Rocky Patch

Amazon, the global e-commerce behemoth, has brought incomparable scale to online retailing. In turn, it has brought incomparable wealth to its founder, Jeff Bezos.
As of Monday&#8217;s market close, Bezos was worth more than $104 billion, making him the world&#8217;s richest person—at least when not factoring in inflation—since Forbes began tracking global wealth 30 years ago. In two years, his net worth has risen over $50 billion, more than the <a href="https://www.cia.gov/library/publications/the-world-factbook/rankorder/2001rank.html" target="_blank" rel="noopener">gross domestic product</a> of Iceland, Belize or Monaco over the same period.
Yet Bezos is not truly the wealthiest person ever, despite numerous reports to the contrary. On an inflation-adjusted basis, Bill Gates has previously been worth far more. In April 1999, for instance, Gates’ net worth eclipsed $100 billion for the first time when Microsoft shares topped out at the apex of the dot-com bubble. That fortune would be worth roughly $150 billion in today’s dollars.
<a href="http://www.forbesafrica.com/billionaires/2017/10/31/amazon-ceo-jeff-bezos-richest-person-world/" target="_blank" rel="noopener">READ MORE: Amazon CEO Jeff Bezos Is The Richest Person In The World &#8211; Again</a>
Gates, who is now worth an estimated $92 billion, would also be far richer if he had not given about $36 billion of Microsoft stock to charity over time, mostly to the Bill and Melinda Gates Foundation, the planet’s largest private philanthropic foundation.
Bezos’ fortune is nonetheless staggering, and he may well top the list of<a href="https://www.forbes.com/billionaires/list/" target="_blank" rel="noopener"> The World’s Billionaires</a> for the first time when Forbes unveils the 2018 ranking in March. Unless Amazon’s share price unexpectedly collapses, he will have the highest-ever net worth of anyone to appear on the ranks, and by a wide margin.
For context, here are the top members of Forbes&#8216; list of The World&#8217;s Billionaires in each of the last 20 years. Also included are their net worths adjusted for inflation through November 2017, based on the most recent data available from the Bureau of Labor Statistics.
2017
Name: Bill Gates
Net worth: $86 billion
Net worth adjusted for inflation: $87 billion
2016
Name: Bill Gates
Net worth: $75 billion
Adjusted for inflation: $77.7 billion
2015
Name: Bill Gates
Net worth: $79.2 billion
Adjusted for inflation: $82.7 billion
2014
Name: Bill Gates
Net worth: $76 billion
Adjusted for inflation: $79.3 billion
2013
Name: Carlos Slim Helú
Net worth: $73 billion
Adjusted for inflation: $77.4 billion
2012
Name: Carlos Slim Helú
Net worth: $69 billion
Adjusted for inflation: $74.2 billion
2011
Name: Carlos Slim Helú
Net worth: $74 billion
Adjusted for inflation: $81.7 billion
2010
Name: Carlos Slim Helú
Net worth: $53.5 billion
Adjusted for inflation: $60.6 billion
2009
Name: Bill Gates
Net worth: $40 billion
Adjusted for inflation: $46.4 billion
2008
Name: Warren Buffett
Net worth: $62 billion
Adjusted for inflation: $71.6 billion
2007
Name: Bill Gates
Net worth: $56 billion
Adjusted for inflation: $67.3 billion
2006
Name: Bill Gates
Net worth: $50 billion
Adjusted for inflation: $61.7 billion
2005
Name: Bill Gates
Net worth: $50 billion
Adjusted for inflation: $63.8 billion
2004
Name: Bill Gates
Net worth: $46 billion
Adjusted for inflation: $60.6 billion
2003
Name: Bill Gates
Net worth: $40.7 billion
Adjusted for inflation: $54.5 billion
2002
Name: Bill Gates
Net worth: $52.8 billion
Adjusted for inflation: $72.8 billion
2001
Name: Bill Gates
Net worth: $58.7 billion
Adjusted for inflation: $82.2 billion
2000
Name: Bill Gates
Net worth: $60 billion
Adjusted for inflation: $86.5 billion
1999
Name: Bill Gates
Net worth: $90 billion
Adjusted for inflation: $134.6 billion
1998
Name: Bill Gates
Net worth: $51 billion
Adjusted for inflation: $77.6 billion
&#8211; Written by <a href="https://www.forbes.com/sites/noahkirsch/" target="_blank" rel="noopener" data-ga-track="contrib block byline">Noah Kirsch</a>, FORBES STAFF

Here’s Why Jeff Bezos Is Not Truly The Richest Person In History

Bank On This Man

Amazon CEO Jeff Bezos&#8217; two day streak as the world&#8217;s only centi-billionaire is over &#8211; for now.
Bezos&#8217; net worth topped $100 billion for the first time on Cyber Monday as Amazon shares soared. On Wednesday, his net worth fell $2.2 billion to $98 billion, as Amazon stock dropped more than 2% from Tuesday&#8217;s close as of 1:45 p.m. Eastern Time. Because Bezos owns more than 16% of Amazon, small fluctuations in Amazon&#8217;s stock have billion-dollar consequences for his net worth.
<a href="http://www.forbesafrica.com/billionaires/2017/07/31/besides-jeff-bezos-6-people-whove-also-worlds-richest/" target="_blank" rel="noopener">READ MORE: Besides Jeff Bezos: 6 People Who&#8217;ve Also Been The World&#8217;s Richest</a>
While he no longer has a twelve-digit fortune, Bezos is still the richest person in the world by an $8.6 billion margin. The second richest person is Microsoft cofounder Bill Gates, who has an $89.4 billion fortune and has been at the top of the Forbes&#8216; annual Billionaires List for 18 of the last 23 years. On October 27, Bezos surpassed Gates on Forbes&#8216; Real-Time Rankings and has held onto the top spot ever since. Three months earlier, Bezos briefly passed up Gates, but dropped into second place after only four hours.
The nearly 60% rise in Amazon stock this year to date has added $33.1 billion to Bezos’ fortune. His net worth has more than doubled since Forbes published the 2016 Billionaires List in March 2016. At that time, he had a net worth of $45.2 billion and had just joined the ranks of the 10 richest people in the world for the first time.
<a href="http://www.forbesafrica.com/cover-story/2017/11/03/lessons-ideas-100-greatest-living-minds/" target="_blank" rel="noopener">READ MORE: Lessons And Ideas By The 100 Greatest Living Business Minds</a>
After graduating from Princeton, Bezos worked at hedge fund D.E. Shaw before leaving to start an online bookstore from a garage in Seattle in 1994. He took Amazon public in 1997 and one year later joined Forbes&#8216; ranking of the 400 richest Americans with a $1.6 billion fortune. In the two decades since, Amazon has grown into an e-commerce giant and one of the most valuable companies in the world, propelling Bezos to the top of Forbes&#8217; Real-Time Billionaires List. &#8211; Written by <a href="https://www.forbes.com/sites/katevinton/" target="_blank" rel="noopener" data-ga-track="contrib block byline">Kate Vinton</a>, FORBES STAFF

As Amazon Shares Fall, Jeff Bezos Is No Longer A Centi-Billionaire

The net worth of billionaire Saudi prince <a href="https://www.forbes.com/profile/prince-alwaleed-bin-talal-alsaud/" target="_blank" rel="noopener">Alwaleed bin Talal Al Saud</a>—who was detained by the Saudi government on Saturday as part of what officials have called an anti-corruption campaign—is continuing to fall dramatically.
Alwaleed’s fortune dropped $855 million on Tuesday as the share price of his holding company, Kingdom Holding—which trades on Saudi Arabia’s Tadawul exchange—continued to drop. The stock, which now comprises half of his net worth, is down 21% since the end of normal trading on Thursday, November 2. (The Tadawul is closed on Fridays and Saturdays.) Alwaleed owns 95% of Kingdom Holding; the remaining 5% trades on the Saudi stock exchange.
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In all, Alwaleed’s net worth is down $2.8 billion since Saturday evening. He is now worth an estimated $15.9 billion, according to Forbes’ <a href="https://www.forbes.com/billionaires/list/#version:realtime" target="_blank" rel="noopener">real-time</a> rankings of the world’s billionaires. He is presently the 83rd richest person on the planet; he was ranked 64th on Saturday.
Alwaleed, 62, is the nephew of Saudi king Salman bin Abdulaziz Al Saud and is a cousin of the country’s crown prince, Mohammed bin Salman. He <a href="https://www.forbes.com/sites/igorbosilkovski/2017/11/04/saudi-billionaire-prince-alwaleed-bin-talal-reportedly-arrested-for-corruption/#4a69f39d5e25" target="_blank" rel="noopener">was one of</a> more than a dozen individuals reportedly arrested last weekend in what many news outlets have described as a purge designed to consolidate the crown prince’s power.
<a href="http://www.forbesafrica.com/billionaires/2017/11/03/roadblock-elon-musks-net-worth-drops-800-million-day-amid-tesla-woes/" target="_blank" rel="noopener">READ MORE: Elon Musk&#8217;s Net Worth Drops $800 Million In A Day Amid Tesla Woes</a>
Forbes profiled Alwaleed in a <a href="https://www.forbes.com/sites/kerryadolan/2013/03/05/prince-alwaleed-and-the-curious-case-of-kingdom-holding-stock/#3ada69e677db" target="_blank" rel="noopener">2013 story</a> that documented his wild eccentricity and self-promotional tendencies. The billionaire had once lived a quieter life. He attended Menlo College in California and Syracuse University before launching Kingdom Holding in 1980. He is perhaps best known in the West for his investments in high-profile companies, including Lyft and Twitter.
Contacted by Forbes on Monday, Kingdom Holding did not respond to a request for comment. &#8211; Written by <a href="https://www.forbes.com/sites/noahkirsch/" target="_blank" rel="noopener" data-ga-track="contrib block byline">Noah Kirsch</a>, FORBES STAFF

Net Worth Of Billionaire Saudi Prince Under Arrest Falls $2.8 Billion

Tesla’s fleet of electric vehicles are known for their smooth ride; production at the company plant has been markedly choppier.
On Wednesday afternoon, the carmaker unveiled its third-quarter earnings. It posted revenue slightly higher than analyst estimates, but also an adjusted loss of $2.92 per share, 30% greater than predicted. Moreover, production bottlenecks have delayed shipments of the company’s new Model 3 vehicle, rendering it unlikely that Tesla will achieve its target delivery pace of 500,000 cars per year by the end of 2018. (Read more on that <a href="https://www.forbes.com/sites/alanohnsman/2017/11/01/tesla-pins-model-3-production-snag-on-battery-packs-as-quarterly-loss-widens/#25b2b4905488" target="_blank" rel="noopener">here</a>.)
In light of that news, investors sent Tesla shares tumbling 7% through 11:15 Eastern Time on Thursday. The stock is now trading below $300 per share for the first time since May.
That decline impacted no person as much as <a href="https://www.forbes.com/profile/elon-musk/" target="_blank" rel="noopener">Elon Musk</a>, Tesla’s CEO and largest individual shareholder. His net worth slumped $800 million in response to the bad news. He is now worth an estimated $19.1 billion, according to Forbes’ <a href="https://www.forbes.com/billionaires/list/#version:realtime" target="_blank" rel="noopener">real-time</a> rankings of the World’s Billionaires, and is the 23rd richest person in America. His net worth is down $1.7 billion since the annual <a href="https://www.forbes.com/forbes-400/#400d61287e2f" target="_blank" rel="noopener">Forbes 400</a> ranking was published last month.
<a href="http://www.forbesafrica.com/billionaires/2017/08/24/elon-musks-net-worth-eclipses-20-billion-first-time/" target="_blank" rel="noopener">READ MORE: Elon Musk&#8217;s Net Worth Eclipses $20 Billion For The First Time</a>
Fortunately for the South African native, his wealth is somewhat diversified. Roughly half of his fortune is tied up in Tesla shares. The bulk of the rest is comprised of his stake in rocket maker SpaceX, which <a href="https://www.forbes.com/sites/noahkirsch/2017/08/23/elon-musks-net-worth-eclipses-20-billion-for-first-time/#45cdd0c86ac7" target="_blank" rel="noopener">raised $350 million</a> in July at a valuation of about $21 billion. He owns approximately 50% of the business.
Musk, 46, has a long track record of entrepreneurial success. His first major exit came in 1999, when he sold software firm Zip2, which he cofounded, to Compaq for a reported price of over $300 million. He then earned an even more lucrative payout in 2002 after Paypal, which he also cofounded, was acquired by eBay for $1.4 billion.
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He joined Tesla in 2004 as a major investor and took the helm in 2008. At the time, the company’s future looked dire, as credit markets were drying up during the global financial crisis and development was severely behind schedule.
Eventually, the company began churning out cars, beginning with its sleek Roadster vehicle. Even with this week’s decline, the business has been an overall colossal success. It now boasts a market capitalization of nearly $50 billion. &#8211; Written by <a href="https://www.forbes.com/sites/noahkirsch/" target="_blank" rel="noopener" data-ga-track="contrib block byline">Noah Kirsch</a>, FORBES STAFF

Roadblock: Elon Musk’s Net Worth Drops $800 Million In A Day Amid Tesla Woes

Amazon CEO Jeff Bezos is now the richest person in the world for the second time.
On Friday morning, Amazon stock opened up more than 8% higher than Thursday’s close, adding nearly $7 billion to Bezos’ net worth. But thanks to a 7% spike in Microsoft’s stock overnight, it wasn’t quite enough to put him ahead of Microsoft cofounder Bill Gates on <a href="https://www.forbes.com/billionaires/list/#version:realtime" target="_blank" rel="noopener">Forbes’ Real-Time Billionaire Rankings</a>. Bezos had a net worth of $89.7 billion, as of the start of trading on Friday, while Gates had a net worth of $90.1 billion, up $550 million from Thursday. Then by 10:15 a.m. Eastern, Amazon stock had climbed nearly 2% since the market opened, adding $900 million to Bezos’ net worth and putting him in the No. 1 spot with a net worth of $90.6 billion versus Gates’ $90.1 billion at that time.
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Amazon stock surged in after-hours trading on Thursday after the company reported strong third quarter earnings. Amazon reported $43.7 billion in revenue, well above the $42.1 billion analysts expected. Whole Foods, which Amazon acquired in August, made up $1.3 billion of total revenue for the quarter.
Bezos became the richest person in the world for the first time three months ago as Amazon stock hit an all-time high on July 27, just before Amazon reported its second quarter earnings. But Bezos’ first time at the top of Forbes’ Real-Time Billionaires List only lasted a few hours. That same day, Amazon reported a big miss on earnings in its second quarter, leading to a drop in the e-commerce giant’s stock. Only today has Amazon stock returned close to its previous high, as the stock market responded positively to Amazon’s third quarter results.
<a href="http://www.forbesafrica.com/billionaires/2017/07/28/amazon-ceo-jeff-bezos-reign-worlds-richest-lasted-just-hours/" target="_blank" rel="noopener">READ MORE: Amazon CEO Jeff Bezos’ Reign As World’s Richest Lasted Just A Few Hours</a>
When Forbes published The FORBES 400 list of richest Americans earlier in October, Bezos was the second richest person in America, worth $7.5 billion less than Gates. Bezos first joined the Forbes 400 in 1998, one year after Amazon went public, with a net worth of $1.6 billion. &#8211; <a href="https://www.forbes.com/sites/katevinton/" target="_blank" rel="noopener" data-ga-track="contrib block byline">Kate Vinton</a>, FORBES STAFF

Amazon CEO Jeff Bezos Is The Richest Person In The World – Again

A tough New York real estate market, a costly lawsuit and an expensive presidential campaign all contributed to the declining fortune of the 45th president. After months of digging through financial disclosures and public property records and conducting dozens of interviews, Forbes now estimates POTUS&#8217; net worth at $3.1 billion, down from $3.7 billion a year ago. He drops to No. 248 in the ranks of the richest people in America, down from No. 156 in 2016.
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The biggest hit was to Trump&#8217;s real estate portfolio, which is weighted heavily toward New York City. Values of several Manhattan properties, particularly those on or near Fifth Avenue, have dropped, shaving nearly $400 million off his fortune. Some of his golf properties, including ones in Miami, Ireland and Scotland, have also declined in value, as some would-be guests stayed away, apparently offended by the president&#8217;s politics and bombast. Trump&#8217;s cash pile is down an estimated $100 million since last year, after he spent $66 million on his campaign and $25 million settling a lawsuit over Trump University. As always, we refined our estimates based on new information uncovered during months of reporting.
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A handful of Trump&#8217;s assets rose in value in the past year, including the hotel-condo tower in Las Vegas that he owns with fellow Forbes 400 member Phil Ruffin and his minority stake in a downtown San Francisco office building, which continues to benefit from the red-hot real estate market there. &#8211; Written by <a href="https://www.forbes.com/sites/danalexander/" target="_blank" rel="noopener" data-ga-track="contrib block byline">Dan Alexander and </a><a href="https://www.forbes.com/sites/mattdrange/#46912f5c45b3" target="_self">Matt Drange</a>, FORBES STAFF

How Donald Trump’s Fortune Fell $600 Million In One Year

Dressed in a blue suit and red tie, Donald Trump’s 79-year-old pick for Secretary of Commerce sat before a panel of senators for nearly four hours in January, deflecting dozens of questions with relative ease. When one legislator at the confirmation hearing asked <a href="https://www.forbes.com/profile/wilbur-ross-jr/" target="_blank" rel="noopener">Wilbur Ross</a> how he would ensure that his official actions did not create conflicts of interest, given his vast personal holdings, Ross left little room for criticism. “I intend to be quite scrupulous about recusal and any topic where there is the slightest scintilla of doubt,” he said.
What he left unsaid, however, was that between the November election and January inauguration, he had quietly moved a chunk of assets into trusts for his family members, leaving more than $2 billion off of his financial disclosure report &#8211; and therefore out of the public eye. Ross revealed the existence of those assets, and the timing of the transfer, when Forbes asked why his financial disclosure form listed fewer assets than he had previously told the magazine he owned.
The hidden assets raise questions about whether the Secretary of Commerce violated federal rules and whether his family owns billions in holdings that could create the appearance of conflicts of interest.
Federal law requires incoming cabinet members to disclose assets they currently own, as well as any that produced income during the current and previous calendar years, even if they no longer own the assets. Ross says he followed all rules. But how someone could apparently hold $2 billion in assets, without producing big income that would show up on a financial disclosure report, raises more questions than answers.
Three months before the 2016 election, Ross’ assistant described his portfolio to Forbes as a mix that would theoretically throw off plenty of cash: $1.3 billion of municipal bonds, $1.3 billion worth of interests in general and limited partnerships, $550 million of equities, $225 million of art, $180 million in cash and $120 million worth of real estate.
That adds up to $3.7 billion. Last year, Forbes asked for documentation to prove the existence of those assets, received nothing in return, and ultimately estimated Ross’ fortune at a more conservative $2.9 billion for its annual Forbes 400 list of the richest Americans, published in October. This year, the Secretary of Commerce said he would dig up a breakdown of the assets he transferred into trusts, but he never sent anything. It is unclear whether he cited accurate figures either year.
Ross gave some clues about the structure of the trusts. “I’m not the beneficiary of them,” he said. “That’s the point. This is set up for children and things like that.” Are his children the only beneficiaries? “Yes, well, and some third parties.” What are the third parties? “It’s a complicated story, but there are children from former marriages, things like that, that are not actually my children but who are beneficiaries.” His wife’s two children? “No, others. We’ve both had a couple of marriages, as you probably know.” He said no one outside of his family is a beneficiary of the trusts.
But he did not answer more than a dozen follow-up questions, including how many trusts there are, whether he can reclaim the assets after he leaves government, and whether the trusts could pay him income in the future.
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Walter Shaub, who resigned as the director of the U.S. Office of Government Ethics in July 2017, said the rules governing a particular trust are key to understanding whether an official has to disclose the entire trust, or just the assets that produced income shortly before they were transferred out of the filer’s hands. “If someone were to divest an asset by giving it away, it’s important that that asset never wind up back in the donors’ hands again,” Shaub said. “If at some point in the future that person ends up with the asset again, it’s going to look like it was a sham divestiture.”
Two trust attorneys expressed doubt that Ross suddenly made a clean transfer of more than $2 billion to his family, a move that could trigger gift taxes of $800 million or more. Such a move would be especially perplexing, they said, since the Trump administration has proposed easing the tax burden on transfers between generations. “If the estate tax goes away,” said Donald Hamburg, a New York City-based trusts and estates attorney, “then why would you pay a lot of money to get property out of your estate to save estate taxes?”
Ross said he followed all tax rules. It is possible that he transferred some of the assets to his family members years ago. He initially told Forbes that he transferred assets into the trusts shortly after the Nov. 8, 2016 election. But in a later email, he hinted that some of the assets may have belonged to his family members previously. “My personal financial affairs have been complex for a number of years, not just one,” he wrote. “The rough estimates used by Forbes for many years were based on a broad definition of family assets.”
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Ross would not have been required to disclose assets that earned income in 2016 if he had transferred those assets to children in prior years. He did not answer a follow-up question directly asking if he had transferred some of the assets to his family members before the election.
In any case, the fact that the Secretary of Commerce says his family members are beneficiaries to trusts with more than $2 billion worth of undisclosed assets raised concerns among ethics experts. “That’s an enormous amount,” said Richard Painter, who served as the chief ethics lawyer for President George W. Bush. “It technically avoids the conflict of interest statutes, but don’t you think that the Senate ought to know that he basically avoided it by handing the conflict-producing asset over to your kids?”
Not including the undisclosed assets, Ross retains an estimated $700 million, still enough to make him one of the richest members of Donald Trump’s cabinet but not enough to qualify for The Forbes 400 list of America’s richest people. “I don’t care if I’m on the list or not,” he said. “That frankly doesn’t matter. But what I don’t want is for people to suddenly think that I’ve lost a lot of money when it’s not true.” &#8211; Written by <a href="https://www.forbes.com/sites/danalexander/" target="_blank" rel="noopener" data-ga-track="contrib block byline">Dan Alexander</a>, FORBES STAFF

The Mystery Of Wilbur Ross’ Missing Billions

The world&#8217;s wealthiest woman, L&#8217;Oreal heiress <a href="https://www.forbes.com/profile/liliane-bettencourt/" target="_blank" rel="noopener">Liliane Bettencourt</a>, has died, according to a statement from her daughter on Thursday. She was 94 and was the thirteenth richest person in the world at the time of her death, with a net worth that Forbes estimates at $44.7 billion.
&#8220;Liliane Bettencourt died last night at home,&#8221; her daughter Francoise Bettencourt-Meyers wrote in <a href="https://www.theguardian.com/world/2017/sep/21/world-richest-woman-liliane-bettencourt-dies" target="_blank" rel="noopener">a statement to the Guardian</a>. &#8220;She died peacefully.&#8221;
Bettencourt owned 33% of makeup giant L&#8217;Oreal, which her father Eugene Schueller founded in 1907. Bettencourt was Schueller&#8217;s only daughter and sole heiress. She appeared on Forbes&#8216; first ever World&#8217;s Billionaires List in 1987 with a net worth of over $1 billion.
&#8220;We all had a great admiration for Liliane Bettencourt who always looked after L&#8217;Oreal, the company and its employees, and was very attached to its success and development,&#8221; Jean-Paul Agon, Chairman and CEO of L&#8217;Oreal, said in <a href="http://www.euroinvestor.com/news/2017/09/21/loreal-news-release-the-passing-of-mrs-liliane-bettencourt/13676988" target="_blank" rel="noopener">a statement</a>. &#8220;She has personally contributed greatly to its success for many years.&#8221;
Bettencourt was famously press-shy, but her later years were mired by public court battles. In 2011, a court found Bettencourt, who had dementia, unfit to manage her affairs and placed her under the guardianship of her daughter and her grandsons. Her grandson Jean-Victor Meyers replaced her on the company&#8217;s board the next year. In May 2015, a French court found eight people, including a photographer and several former wealth managers, guilty of taking advantage of Bettencourt&#8217;s mental state and swindling her out of millions of euros.
Over Bettencourt&#8217;s lifetime, L&#8217;Oreal has grown into a global beauty giant, employing 89,300 people worldwide. The company had $28.58 billion in sales in 2016 and has 34 beauty brands in its portfolio, including Kiehl&#8217;s, IT Cosmetics and Maybelline. &#8211; Written by <a href="https://www.forbes.com/sites/katevinton/" target="_blank" rel="noopener" data-ga-track="contrib block byline">Kate Vinton</a>, FORBES STAFF

The World’s Wealthiest Woman, L’Oreal Heiress Liliane Bettencourt, Dies At Age 94

On Tuesday, billionaire Carl Icahn announced he had sold the unfinished Fontainebleau resort in Las Vegas for $600 million, quadrupling his money in seven years. Just up the Las Vegas strip a few weeks earlier, in June, Golden Entertainment said it had agreed to buy the Stratosphere resort for $850 million from Goldman Sachs.
These summer deals for the Fontainebleau and Stratosphere show Icahn at his best and are a reminder that while many people go to Las Vegas to gamble, Icahn has been enormously successful playing his own game, betting on the booms and busts of Las Vegas that have humbled other big players.
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One of the greatest deals Icahn ever made was for the Stratosphere resort, a hotel-casino that includes the nation’s tallest freestanding observation tower. The vision of Bob Stupak and located north of the Las Vegas Strip, the Stratosphere opened in 1996 and by the winter of 1997 it was in bankruptcy court.
Icahn took control of the situation by buying big chunks of the Stratosphere’s debt for pennies on the dollar, becoming its biggest creditor. He purchased the Stratosphere out of bankruptcy court in 1998 and eventually bought out the minority shareholders, too.
But he didn’t stop there. Icahn bought 17 acres of vacant land surrounding the hotel, tracking down the owners of individual homes and properties, many of them abandoned in what was then an economically depressed part of town. Some observers thought Icahn had lost his mind. After picking up some other casino assets like Las Vegas’ Arizona Charlie’s, Icahn’s Vegas bet all-in totaled about $300 million.
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As Bob Stupak had envisioned, Las Vegas boomed and tourists found their way up the Las Vegas Strip to the Stratosphere. With the credit markets flowing, Icahn sold the Stratosphere assets for $1.3 billion to Goldman Sachs’ Whitehall Street Real Estate Fund in 2007 at the top of the market cycle. Goldman Sachs’ lending arm funded the deal with lots of debt and the land Icahn had purchased around the Stratosphere was the key to the deal that closed on the eve of the financial crisis. Icahn made $1 billion in profits. &#8211; Written by <a href="https://www.forbes.com/sites/nathanvardi/" target="_blank" rel="noopener" data-ga-track="contrib block byline">Nathan Vardi</a>, FORBES STAFF

How Carl Icahn Made $1.4 Billion Playing The Booms And Busts Of Las Vegas

Elon Musk, a polymath entrepreneur who nearly went bankrupt launching Tesla Motors and rocket company SpaceX, is now worth more than $20 billion.
On Wednesday, Forbes unveiled its annual <a href="https://www.forbes.com/richest-in-tech/#699b58697316" target="_blank" rel="noopener">Richest In Tech</a> list, which ranks the 100 wealthiest self-made tech billionaires. Musk placed 12th in the order, at $20.7 billion, ahead of high-profile names including Paul Allen ($20.5 billion) and Eric Schmidt ($12.4 billion).
This week marks the first time Musk’s fortune has eclipsed $20 billion on Forbes’ <a href="https://www.forbes.com/billionaires/list/#version:realtime" target="_blank" rel="noopener">rankings</a> of the planet’s wealthiest people. In March, when Forbes released its list of <a href="http://www.forbes.com/billionaires/list/" target="_blank" rel="noopener">The World’s Billionaires</a>, his net worth stood at $13.9 billion.
Much of the increase since then is attributable to the soaring value of aerospace firm SpaceX. The company, which ultimately plans to send humans to Mars, raised $350 million last month at a valuation of about $21 billion; <a href="https://www.forbes.com/profile/elon-musk/" target="_blank" rel="noopener">Musk</a> owns more than half of the business. News of the funding round was first <a href="https://www.nytimes.com/2017/07/27/technology/spacex-is-now-one-of-the-worlds-most-valuable-privately-held-companies.html?_r=0" target="_blank" rel="noopener">reported</a> by the New York Times.
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SpaceX has notched a number of significant achievements this year. In March, it sent a cargo payload <a href="https://www.forbes.com/sites/alexknapp/2017/03/30/what-spacexs-successful-reusable-rocket-launch-means-for-the-space-industry/#7217ccae731e" target="_blank" rel="noopener">into orbit</a> with a previously-used rocket, making it the first private company to do so. More recently, on Wednesday, Musk revealed the first images of a SpaceX spacesuit on his personal Instagram <a href="https://www.instagram.com/p/BYIPmEFAIIn/" target="_blank" rel="noopener">page</a>. He confirmed in February that the company will send humans to space as early as next year.
Progress at Tesla, Musk’s publicly-traded electric carmaker, has also been strong. The company is rolling out a new, lower-priced vehicle, the Model 3, to substantial demand and nearly universal acclaim. The business continues to rack up losses, but Tesla’s stock has nonetheless jumped 55% in the last year.
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Musk, 46, realized his first major entrepreneurial success in 1999 selling software firm Zip2, which he cofounded, to Compaq for a reported price of more than $300 million; he had previously deferred graduate school at Stanford to start the business. He then made an even larger fortune after Paypal, which he also cofounded, was acquired by eBay for $1.4 billion in 2002.
Musk joined Tesla in 2004 as a key investor and became CEO in 2008, when the business struggled to find credit during the global financial crisis. He reportedly liquidated nearly all of his assets to fund continued development at Tesla and SpaceX, both of which were viewed as long-shot ventures by many outsiders.
Now, as SpaceX rockets fly further into space, Musk’s net worth seems to defy gravity as well. &#8211; Written by <a href="https://www.forbes.com/sites/noahkirsch/" target="_blank" rel="noopener" data-ga-track="contrib block byline">Noah Kirsch</a>, FORBES STAFF

Elon Musk’s Net Worth Eclipses $20 Billion For First Time

Amazon founder and CEO Jeff Bezos’ reign on the top of the Forbes’ Real Time Billionaires List only lasted a morning.
Bezos became the richest person in the world for the first time with a $90.6 billion net worth when markets opened on Thursday. But while Amazon stock climbed another 1.3% to an intraday high of $1,083.31, it then dropped down to $1,046 by the time markets closed, knocking Bezos out of the top spot. He ended the day with an $88.7 billion fortune, down $540 million from late Wednesday. Bill Gates is once again the richest person in the world with an estimated $89.8 billion fortune, down $240 million from yesterday.
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Despite the drop, this is likely not Bezos’ last time at the top of Forbes’ real-time ranking. Because he owns nearly 17% of Amazon stock, small fluctuations in Amazon’s stock have billion-dollar consequences for Bezos’ net worth. As of the close of markets Thursday, Bezos was only $1.1 billion behind Gates.
Bezos’ net worth took a further hit in after hours trading Thursday when Amazon reported its second quarter earnings and had a big miss on earnings. Amazon reported earnings per share of $0.40, lower than the $1.42 per share analysts had estimated. Amazon stock dropped more than 2% in after hours trading as of 4:45 p.m. Eastern, which further reduced Bezos’ fortune by $1.8 billion. He is now worth $86.9 billion, which means the gap between Gates and Bezos is now $2.9 billion.
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Bezos joined Forbes ranking of the 400 richest Americans in 1998, one year after Amazon went public, with a $1.6 billion fortune. He started the online retail giant in a garage in Seattle before his 30th birthday. &#8211; Written by <a href="https://www.forbes.com/sites/katevinton/" target="_blank" rel="noopener noreferrer">Kate Vinton</a>, FORBES STAFF

Amazon CEO Jeff Bezos’ Reign As World’s Richest Lasted Just A Few Hours

Amazon CEO <a href="http://www.forbes.com/profile/jeff-bezos/" target="_blank" rel="noopener noreferrer">Jeff Bezos</a> is inching ever closer to becoming the richest person in the world.
Bezos&#8217; net worth increased $1 billion to $89.3 billion on Wednesday, putting him less than $900 million away from surpassing Microsoft co-founder <a href="http://www.forbes.com/profile/bill-gates/" target="_blank" rel="noopener noreferrer">Bill Gates</a> to become the richest person in the world. His net worth has increased $2.2 billion this week due to a 2% increase in Amazon&#8217;s stock price;  it has increased $16.5 billion since Forbes&#8217; <a href="https://www.forbes.com/sites/kerryadolan/2017/03/20/forbes-2017-billionaires-list-meet-the-richest-people-on-the-planet/#35ae555562ff" target="_blank" rel="noopener noreferrer">2017 Billionaires List</a> was published in March.
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At the end of March, Bezos briefly became the <a href="https://www.forbes.com/sites/katevinton/2017/03/30/bezos-blastoff-amazon-founder-briefly-becomes-worlds-second-richest-for-first-time/#1ff9cfb7a51e" target="_blank" rel="noopener noreferrer">second richest person in the world </a>for the first time. He has been the <a href="https://www.forbes.com/sites/noahkirsch/2017/06/16/jeff-bezos-worlds-second-richest-person-following-whole-foods-deal/#17fb017d4595" target="_blank" rel="noopener noreferrer">second richest person continuously since June</a>, when Amazon announced plans acquire Whole Foods for $13.7 billion in cash. At that time, Gates was nearly $5 billion richer than Bezos.
Now, the gap between the two Seattle-area residents has narrowed to just $800 million. If Amazon stock rises more than 1% on Thursday or in after-hours trading, Bezos could unseat Gates, who has been the world&#8217;s richest person on Forbes annual Billionaires List for 18 of the past 23 years.
Bezos&#8217; rise to the top started in a garage in Seattle, where he began selling books online after leaving a hedge fund job. He first joined the ranks of the 400 richest Americans in 1998, a year after Amazon.com went public, with a $1.6 billion fortune. Today, Bezos&#8217; net worth easily rises or falls by that amount with small moves in Amazon&#8217;s stock because he owns nearly 17% of the tech giant, which has a $503 billion market capitalization. &#8211; Written by <a href="https://www.forbes.com/sites/katevinton/">Kate Vinton</a>, FORBES STAFF

Amazon CEO Jeff Bezos Is Now Less Than $1 Billion From Being The Richest Person In The World

It happened one Saturday afternoon; the meat was on the fire, the smoke was in the air, and a father sat his 13-year-old son down for a paternal chat that was to change his life.
The father was billionaire investor Jannie Mouton – known as the &#8216;Boere Buffett&#8217;. The son was Piet Mouton who was to grow up into a multi-million-dollar investor. Billionaire and son have beefed up PSG, the investment holding company worth $4.3 billion (market cap) that has spread to a combined market capitalization of approximately $12.5 billion in just 22 years.
&#8220;Growing up in our family, at the age of 13 I already knew what options and futures were… It was a new thing on the JSE and my dad came home and, at a braai on a Saturday, he sat me and my brother down and explained it to us. So here I had some great knowledge that I didn&#8217;t know what to do with at school, but I understood the concept of options and futures,&#8221; says Piet.
&#8220;[PSG] was part of our life growing up, the entire business concept. Being mathematically inclined, [my future idea] wasn&#8217;t necessarily to go into business with my father, but it was to go into business.&#8221;
This was the incredible inside story told from the two men as FORBES AFRICA sat down at 35 Church Street, Stellenbosch, in the heart of the quaint South African wine farm to hear how one family built an investment giant.
&#8220;My wife once told me that was your favorite child, PSG, you never ask anything about Jan or Piet, or Charity. It’s only PSG, PSG. The whole braai [barbeque], the whole evening was talking about PSG. It was very much part and parcel of how we started,&#8221; says Jannie.
The choice of the building in Church Street for this interview was a spot-on smart investment.  They call it Ou Kollege and it is as much of a reflection of their humble characters as their life stories. The wooden panels, grey walls, African paintings and sculptures of leopards have that millionaire touch. Jannie bought it with his old friend GT Ferreira, FirstRand founder and also a multimillionaire. The two men decorated it with paint pot and brush in hand.
&#8220;We bought this building and we haven&#8217;t left.  I remember GT saying to me &#8216;Jannie, it&#8217;s just a structure, you must put stuff in it as well&#8217;, so he ended up being the interior decorator here as well,&#8221; says Jannie.
&#8220;You can see this wood paneling is the same as GT&#8217;s office on the third floor which looks very similar to what we&#8217;ve got. It had the same interior decorator at the end of the day,&#8221; says Piet, as they both laugh.
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On this day, in the very room where they plotted billions of dollars of investment around the world, Piet and Jannie don matching black suits and white shirts. They are every inch the shrewd businessmen, with a dash of down-to-earth humility.
Thomas Edison, the man famous for the lightbulb, once said opportunity is missed by most people because it is dressed in overalls and looks like work. The Moutons are dressed in suits and look like investment.
Jannie founded the group just 22 years ago after a kick in the gut. He was fired by his partners from his own stock broking firm. To add insult to injury, his name as part of Senekal, Mouton &amp; Kitshoff was on the door. The fact that Mouton will never forget August 5, 1995, shows how deeply it hurt him. At the time, probably the last thing on his mind was that this humiliation was the best thing that ever happened to him.
<div id="attachment_32675" style="width: 270px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-32675" class=" wp-image-32675" src="http://www.forbesafrica.com/wp-content/uploads/2017/07/IMG_2492.LR_-200x300.jpg" alt="" width="260" height="390" />Jannie Mouton (Photo by Jay Caboz)</div>
<blockquote>&#8220;If you were fired in your life, you must have realized you&#8217;ve made a mistake. I think it was a good lesson. It&#8217;s a team effort and all the team must be happy and must respect their standing credibility and wisdom. I&#8217;ve learned a lot about that,&#8221; says Jannie.</blockquote>
That lesson hit like a sledgehammer when young Piet was told the news.
&#8220;I was in first-year and was 19 years old. The first part started with Jannie being fired. He was so ashamed he got my mother to phone us up and say he&#8217;d resigned,&#8221; says Piet.
Jannie searched his soul and vowed to own a financial services JSE-listed company. It took three months to get onto the JSE. Jannie, then 48 years old, bought a 51% share of JSE-listed PAG for R3.5 million ($273,000). He sold it two years later for R107 million ($8.35 million).
Then he went home. He settled in Stellenbosch, the town where he studied alongside fellow decorator GT, in the Western Cape.
From these humble beginnings the PSG Group took off like a rocket with annual compound growth in earnings of 50.8% a year.
Their main investments are in bank start-up Capitec, private education firm Curro Holdings, PSG Konsult and agribusiness firm Zeder – with the 31% interest in Capitec constituting roughly 40% of the value of PSG&#8217;s portfolio.
Here&#8217;s how rapidly PSG has grown: An investment of R100,000 ($78,000), on its first day in business, would be worth approximately R390 million ($30.5 million) today if all dividends were reinvested. No other company in the world matches this, according to the Moutons and researchers at the Top Performing Companies &amp; Public Sector.
Jannie is Afrikaans with a capital A. When you speak to him you can see he thinks in Afrikaans and speaks in English. Yet when it comes to business he knows, whenever he speaks, English is king. So when it came to sending his sons to school he bent the rules to claim he was English-speaking so they could grow up learning the world language.
&#8220;My wife was a bit smarter than me. She was in an English school her whole life at Rustenburg Girls’ High. She realized how important English was in life and in business… To send your children from an Afrikaans background to an English school, you had to apply officially. Otherwise they wouldn&#8217;t do it. I still have the little document that says I am English-speaking. That was to protect Afrikaans, they didn&#8217;t want Afrikaans schools and English schools to mix.&#8221;
With parental guidance, and the English language, Piet took to business like a duck to water in his first year at Stellenbosch University where he studied actuarial science.
&#8220;Remember, this was at a time when we were coming into a new democracy. We were at university, there was massive growth in the PSG share price, I think it went up from 36c and peaked at about R18 which was my last year at university. Students do take interest in what happens in the world and it&#8217;s a phenomenal story, so everybody knew who Jannie was, and obviously Jannie and GT were Simonsberg Old Boys, which was the residence where I went to,&#8221; says Piet.
With seven years as CEO of PSG, Piet is the new generation injecting adrenalin into the beating heart of this $4.3-billion company. There were no short cuts for the young Piet, according to Jannie, he had to work his way up the corporate ladder.
<div id="attachment_32676" style="width: 266px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-32676" class=" wp-image-32676" src="http://www.forbesafrica.com/wp-content/uploads/2017/07/IMG_2503.LR_-200x300.jpg" alt="" width="256" height="384" />Piet Mouton (Photo by Jay Caboz)</div>
&#8220;Piet had started in the group in 2004 with a company called Arch Equity. It was actually a tough day in our lives, because his mother and my wife passed away on 11th of May. On the 17th we launched Arch Equity. We never discussed him becoming CEO,&#8221; says Jannie.
&#8220;Piet was a candidate and I stood back. His colleagues selected him. Here, in private and in public, Piet was the best candidate, I couldn&#8217;t get involved. I would never do that in my life, misuse my title and it was the shareholders decision to appoint him head of the board… For us, it&#8217;s the best CEO who must be in charge.&#8221;
Despite this, you can only imagine the pressure that Piet feels. Not only does he juggle billions in other people&#8217;s money, the chairperson is also your father, the person who started to build it.
&#8220;[Jannie&#8217;s] entire business philosophy is a lesson. The biggest one is don&#8217;t give me problems, give me solutions. Jannie always says &#8216;it&#8217;s easier to tell a guy something won&#8217;t work, it&#8217;s a lot more difficult to sit with an idea and think of a way of doing it differently&#8217;,&#8221; says Piet.
A cornerstone of PSG&#8217;s success is a 30.7% stake in Capitec Bank. In 2002, Capitec’s individual shares listings were worth less than a rand and now they are worth R531 ($41.50). The guiding spirit of Capitec is Michiel le Roux, who disrupted South Africa&#8217;s once cozy banking market by bringing in an aggressive strategy in search of deposits from low-income earners.
<blockquote>&#8220;The Moutons, as the main drivers behind PSG, have built a company that created wealth for many. Their active involvement in the beginning years to get the Capitec dream off the ground was crucial to our success,” says Le Roux.</blockquote>
Capitec was built on 300 micro-lending branches. It shook up the banking sector with new ideas, like the no-brainer of opening on Sundays.
&#8220;The five big banks, prior to Capitec, sat back and they had a nice little oligopoly. Capitec came around and they were allowed to build a great business. By the time the competition realized this is a real player, it was too late. Now Capitec is a serious competitor,&#8221; says Piet.
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PSG has proven time and again that opportunities can be found in the pessimism of others. These are tough times for South Africa, one of Africa&#8217;s most developed economies. It has suffered a string of downgrades, political uncertainty and questions about corruption and fiscal mismanagement.
&#8220;Everybody is always outwardly focused in South Africa… But it means you can actually operate in a very uncompetitive environment. You would not have been able to start a Capitec in London,&#8221; says Piet.
Now technology is also a factor.
&#8220;Each and every week, we at PSG level encourage our subsidiaries to look at the changes. It&#8217;s a fact of life. From the start [Capitec] was a bit of an IT business but now it&#8217;s becoming more and more an IT business. Just look back 10 years; it&#8217;s unbelievable how business has changed. I&#8217;ve also realized my generation has to step back, because we don&#8217;t keep pace with this generation,&#8221; says Jannie.
&#8220;It&#8217;s going to continue changing in the years ahead. It&#8217;s a big thing at all the companies at the moment. You have to sit down and look at your business model and say ‘can it be interrupted?’ There are businesses that are just not there, take for example Kodak,&#8221; says Piet.
&#8220;Now you sit at the Capitec level and you say we mustn&#8217;t be caught with our pants down, because there are guys sitting in garages developing FinTech stuff. At least we at Capitec acknowledge – we don&#8217;t know where the problem is going to come from, we&#8217;ve got to constantly be smart about it,&#8221; says Piet.
&#8220;There are 150 people working on innovation and it’s costing us R200 million ($15.6 million) a year, to constantly scan and see if we can implement some of this new innovation.&#8221;
A recent purchase of an online lender in Poland is a Capitec move toward technology.
&#8220;The model is slightly different here. Whereas here in South Africa we are backed by bricks and mortar with 800 branches with a massive 300 ATM network, there it will be an online operation. Michiel coined a great phrase, shortly after I came back from the UK: it was either going to be a small failure or a big success. Now, where a lot of corporates go overseas and make massive acquisitions and then try implement them, Capitec actually tackled a very small business that has the potential to expand and they can contribute capital if it grows… It&#8217;s a longer path but it&#8217;s a sure way of hitting success at the end of the day. If it&#8217;s a failure it&#8217;s a small failure,&#8221; says Piet.
Another of PSG&#8217;s success stories is Chris van der Merwe&#8217;s Curro Holdings that develops, acquires and manages private schools in South Africa. What started off as a school of 28 learners in the hall of a church in Durbanville, Cape Town, now has a market cap of $1.4 billion.
&#8220;Chris van der Merwe is a unique person. Education and doing something great for the company is his passion. He tells you to your face he doesn&#8217;t understand accounts or profits. He is one of the people I admire in life, he isn&#8217;t fanatically orientated but he has a big thing about education,&#8221; says Jannie.
&#8220;Chris was a primary school teacher who knew he was also phenomenal businessman. He built the school himself, with his own hands. He took his early pension, started with 28 kids in a class, now it&#8217;s up to 50,000,&#8221; says Piet.
In May, Curro Holdings announced it would buy the South African School of Motion Picture Medium and Live Performance (AFDA) – a film, television and live performance higher education institution. Step one of an expansion into the tertiary education system under the soon-to-be JSE-listed company Stadio. In six years, the share price has increased more than 300% to R44.70, with pupil numbers rising 14% to 47,589 in 2016, reports CNBC AFRICA.
&#8220;A typical school class has about 45 students. At varsity, a class could be 100, and the fees are even a bit more than school. It could be a fantastic model,&#8221; says Jannie.
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Asked if this decision had any particular influence from recent education crisis events, like FeesMustFall, the campaign that saw South African universities come to a standstill amid violence over tuition fees, the Moutons were open.
&#8220;See, there you have almost hit the nail on the head of investments. Big macro themes, if you can get it right, you shouldn&#8217;t be limited to growth. Take the whole education sector as a whole, primary and core, if you can get it right, there is actually a massive scope for growth. You are right about the FeesMustFall, because people are becoming disillusioned [with education].&#8221;
Another company Jannie believes could surprise investors is PSG Konsult. With 270 branches and 800 advisors, each branch is its own company, 70%-owned by the individuals who run it – what Jannie calls ultimate empowerment.
&#8220;You should attract very good people alongside you and you must make them co-workers inside the business. You must trust them implicitly and give them the space to grow. That has worked significantly for our group, because they act like shareholders and look after the company,&#8221; says Piet.
Back in the boardroom, the conversation shifts toward the lighter side of life, something the pair can&#8217;t agree on – rugby.
&#8220;It&#8217;s one of the points we don&#8217;t see eye to eye on. Jannie is a Stormers supporter whereas I am a strong Lions supporter. Literally, Saturdays would be a fight to behold.&#8221;
Imagine if the idea to invest in the Stormers or Lions was raised in this Stellenbosch boardroom.

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