Tesla CEO Elon Musk approaches a $1.8 billion bonanza

  • Tesla has surged 500% over the past year as the company increased sales of its Model 3 sedan.
FILE PHOTO: Tesla China-made Model 3 vehicles are seen during a delivery event at its factory in Shanghai, China. (REUTERS)
FILE PHOTO: Tesla China-made Model 3 vehicles are seen during a delivery event at its factory in Shanghai, China.

Tesla Inc's blistering stock rally is putting Chief Executive Elon Musk in reach of a payday potentially worth $1.8 billion, his second jackpot from the electric car maker in about two months.

Fuelled by stronger-than-expected car deliveries, shares of Tesla have surged over 40% in the past seven sessions, elevating the company's market capitalisation to $259 billion. More important for Musk's personal finances, Tesla's six-month average market capitalisation has reached a record $138 billion.

Also check these Vehicles

Find more Cars
Tesla Model 3 (HT Auto photo)
UPCOMING
BatteryCapacity Icon82kWh Range Icon 555 km
₹ 70 - 90 Lakhs
View Details
Tesla Model S (HT Auto photo)
UPCOMING
BatteryCapacity Icon75 kWh Range Icon396 km
₹70 Lakhs - 1 Cr
View Details
Hero Electric Ae-3 (HT Auto photo)
UPCOMING
BatteryCapacity Icon3 kWh Range Icon100 Km
₹ 1.50 Lakhs
View Details
Byd Atto 3 (HT Auto photo)
BatteryCapacity Icon60.48 kWh Range Icon521 km
₹ 33.90 Lakhs
Compare
Bmw 3 Series (HT Auto photo)
Engine Icon2998.0 cc FuelType IconMultiple
₹ 42.30 - 62.90 Lakhs
Compare
View Offers
Bmw 3 Series Gran Limousine (HT Auto photo)
Engine Icon1998.0 cc FuelType IconMultiple
₹ 57.90 - 59.50 Lakhs
Compare
View Offers

Hitting a six-month average market capitalisation of $150 billion would trigger the vesting of the second of 12 tranches of options granted to the billionaire to buy Tesla stock as part of his 2018 pay package. In early May, Musk's first tranche vested after Tesla's six-month average stock market value reached $100 billion.

Musk has already achieved targets related to Tesla's financial growth that are also required in order to vest the approaching options tranche.

Also Read : China’s EV bubble closer to bursting as Tesla gains ground

Each tranche gives Musk the option to buy 1.69 million Tesla shares at $350.02 each. At Tesla’s current stock price of $1,397, Musk would theoretically be able to sell the shares related to the tranche that vested in May and the upcoming tranche for a combined profit of over $3.5 billion, or $1.8 billion per tranche.

Musk's first tranche was worth about $700 million in May, when it vested, but its value has since increased along with Tesla's stock price.

Tesla has surged 500% over the past year as the company increased sales of its Model 3 sedan.

Also Read : Elon Musk hints next Tesla gigafactory will be in ‘Asia, outside China’

Tesla last week reported higher-than-expected second-quarter vehicle deliveries, defying plummeting sales in the wider auto industry as the coronavirus pandemic slammed the global economy.

The solid delivery numbers heightened expectations of a profitable second quarter, which would mark four consecutive profitable quarters, a first for Tesla, and a key hurdle to be added to the S&P 500 index.

Musk, who is also the majority owner and CEO of the SpaceX rocket maker, receives no salary, only the options in his pay package. A full payoff of all tranches would surpass anything previously granted to US executives.

When Tesla unveiled Musk’s pay package, it said he could theoretically reap as much as $55.8 billion if no new shares were issued. However, Tesla has since issued shares to compensate employees, and also sold shares in secondary offers, including a $2 billion stock sale in February.

First Published Date: 09 Jul 2020, 08:07 AM IST
NEXT ARTICLE BEGINS

Please provide your details to get Personalized Offers on

Choose city
+91 | Choose city
Choose city
Choose city

Want to get the best price for your existing car?

Powered by: Spinny Logo
By clicking "View Offers" you Agree to our Terms and Privacy Policy

Dear Name

Please verify your mobile number.

+91 | Choose city
Couldn't verify the OTP.
It's either expired or it's incorrect.