Tesla Inc CEO (Tesla shares - NASDAQ: TSLA), Elon Musk, will receive an additional $ 3 billion as the company has reached a new milestone in stock market value. Since he received his first payment tranche worth $ 700 million in May, the value of subsequent installments has grown as the value of Tesla stock has risen.
There are eight tranches to complete, each of which gives Musk the option to buy Tesla stock for $ 70 each. In total, the CEO could acquire approximately 8,44 million shares of the company, based on the current price.
Musk will receive an additional $ 3 billion
On Oct.6, Reuters reported that the electric vehicle maker's six-month average share value reached $ 250 billion. The new milestone activates another payment tranche for the CEO in line with his compensation package agreed with Tesla shareholders.
Tesla's pay package for Elon Musk is currently the highest among those of top US executives. In particular, this remuneration package is calculated on the basis of Tesla's market capitalization and operational objectives.
In other words, Musk will receive a series of stock options every time the EV company reaches a set goal in terms of revenue or profitability. Tesla's six-month average capitalization must reach a set of target levels for each of Musk's option tranches to vest.
Musk must also achieve operational goals, of which he has only achieved three so far and another must be achieved before he wins his fourth payment. " Currently, TSLA has a pre-market trading price of $ 419,50.
If Musk sells the last three tranches in addition to the upcoming one, he would make a combined profit of $ 11,8 billion, at $ 3 billion per tranche. Tesla currently boasts a market value of $ 386,47 billion.
Tesla has reached a new milestone
Over the past year, Tesla has increased by more than 746%. Since the beginning of the year, the electric vehicle company has risen by nearly 395%. In addition to recent increases fueled by increased demand for Tesla's Model 3 sedan, the company has added more than 51% in the past three months.
Similarly, TSLA has increased by 13,02% in the past month. However, the stock has lost nearly 4% in the past five days. Ahead of Tesla's quarterly financial report, the company announced a record delivery of 139.300 vehicles.
As noted in the Reuters report, Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) will be the yardstick for Musk's next financial milestone. Additionally, the report revealed that Tesla's Adjusted EBITDA reached $ 4,42 billion in the four quarters to June, which is close to the $ 4,5 billion target that would unlock the next tranche of options for the CEO.
