A mathematical technique originally developed to help build the atomic bomb is now used to figure out how much CEO pay packages are worth — like with Elon Musk

The method involves thousands of computer simulations of a company's stock price. It was developed to understand how nuclear explosions work.

Executive compensation packages have gotten more complicated over time. CEOs are frequently paid in stock shares or options that only vest if certain market or financial goals are met. To figure out an estimate of the fair present value of such plans, companies and executive compensation consultants often use what's called a"Monte Carlo method" from statistics.

Executive compensation packages have gotten more complicated over time. CEOs are frequently paid in stock shares or options that only vest if certain market or financial goals are met. To figure out an estimate of the fair present value of such plans, companies and executive compensation consultants often use what's called a"Monte Carlo method" from statistics.

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