Topline: With Tesla stock rallying to new milestones in recent months and the company about to surpass $100 billion in market value, billionaire founder Elon Musk is coming close to earning the first $346 million of stock awards in a massive, performance-based compensation package, Reuters reported on Tuesday.

  • Tesla is among the stocks making the biggest gains this week, leading the Nasdaq higher as it rose by almost 10% and surged past the $500-per-share mark for the first time on Monday.
  • The stock continued to rise on Tuesday, up by nearly 2% at the time of writing. If it gains several more percentage points, that would put Tesla’s stock market value at $100 billion.
  • If that value is sustained for both a one-month and six-month average period, that would trigger the vesting for the first tranche of options granted to Musk, allowing him to acquire additional Tesla stock, according to Reuters.
  • Musk currently doesn’t receive any salary or cash bonuses—just stock award options that vest based on Tesla’s market cap and growth milestones.
  • Under the terms of his January 2018 compensation package, the next set of options tranches come into play for every $50 billion market value increase—so if Tesla’s market cap reaches $650 billion, Musk could earn the full record-breaking pay package, which could be worth up to $56 billion in stock awards.
  • Musk currently owns around 34 million Tesla shares, or 19% of the company. Under his compensation package, if all of his options vest, Musk can acquire another 20.3 million shares, according to Reuters.

Crucial statistic: Under Musk’s leadership, Tesla has risen in value from less than $4 billion in 2012 to almost $97 billion today.

Big number: Musk is worth almost $31 billion, according to Forbes’ estimates.

Key background: Tesla stock has been on a tear, more than doubling in value over the last three months. It has now risen by nearly 25% within the first two weeks of 2020 alone. Last week, Tesla’s stock market value hit $89 billion for the first time, which is worth more than both General Motors and Ford combined. Tesla shares have soared thanks to better-than-expected third-quarter earnings, strong car deliveries in the fourth quarter and a successful new factory in China.

Big numbers: If Musk gets a full payout, that would reportedly surpass any compensation ever granted to a U.S. executive, according to Reuters. Snap founder Evan Spiegel received $638 million after the company’s IPO in 2017, for example, while Walt Disney CEO Robert Iger earned stock grants worth almost $150 million in 2018.

LEAVE A REPLY

Please enter your comment!
Please enter your name here