Tesla’s quarterly report could land Musk another $3 billion
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By Noel Randewich
(Reuters) – Tesla’s upcoming quarterly report could put another $3 billion in Chief Executive Elon Musk’s pocket.
The electric car maker on Tuesday saw the six-month average of its stock market value hit $250 billion, a milestone toward triggering the fourth of 12 tranches of options to buy Tesla stock at a discount, granted to the billionaire in his 2018 pay package.
Musk’s compensation is exclusively made up of a series of potential stock options rewards based on market capitalization and operational goals. To secure Musk’s fourth tranche, Tesla still must hit a goal related to revenue or profitability, and that could happen in the company’s third-quarter report, the date of which has yet to be announced.
Elon Musk’s expanding payout: https://fingfx.thomsonreuters.com/gfx/mkt/ygdvzklzopw/Pasted%20image%201602009124093.png
Tesla’s stock was down 0.8% at mid-day on Tuesday, but the company’s six-month average market capitalization rose, thanks to a strong rally in recent months.
Each tranche gives Musk the option to buy 8.44 million Tesla shares at $70 each, about a sixth of their current price.
At Tesla’s current stock price of $420, Musk would theoretically be able to sell the shares related to the upcoming tranche, plus three other tranches that vested in recent months, for a combined profit of $11.8 billion, or almost $3 billion per tranche.
Musk’s first tranche was worth about $700 million in May, when it vested, but its value has increased along with Tesla’s stock price.
The Silicon Valley billionaire’s pay package, which surpasses anything previously granted to top U.S. executives, was controversial when it was approved by shareholders. The median compensation