Tesla is Kicking, Elon Musk Looks Set For $346 Million Payday

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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 vests, Musk can acquire another 20.3 million shares, according to Reuters.

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

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

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.

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.

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