Tesla stock rise appears to qualify CEO Elon Musk for US$700 million payday
- Hitting a six-month average of US$100 billion triggers the vesting of the first of 12 tranches of options to buy Tesla stock as part of a pay package agreed in 2018
Tesla Chief Executive Elon Musk appeared to qualify on Monday for a US$700 million payday, just three days after he said the electric car company’s stock price was too high.
Shares of Tesla Inc jumped more than 8 per cent on Monday, putting Tesla’s market capitalisation at US$141.1 billion at the close. More importantly for Musk, Tesla’s stock market value reached a six-month average of US$100.2 billion, according to an analysis of Refinitiv data.
Hitting a six-month average of US$100 billion triggers the vesting of the first of 12 tranches of options granted to the billionaire to buy Tesla stock as part of a pay package agreed in 2018. Musk has already met two other requirements by hitting a growth target and far exceeding a one-month average US$100 billion market cap.
Each tranche gives Musk the option to buy 1.69 million Tesla shares at US$350.02 each. At Tesla’s closing stock price of US$761.19, Musk would theoretically be able to sell the shares for a profit of US$694 million.
Musk on Friday said on Twitter, “Tesla stock price is too high imo,” using an abbreviation for “in my opinion”.
That tweet sent Tesla’s stock tumbling 10 per cent, shocking shareholders. Tesla, whose California factory is closed as part of the state’s coronavirus-related lockdowns, posted its third quarterly profit in a row last week.