Had it not been for the severe Corona slump on stock exchanges around the world at the beginning of March, Tesla CEO Elon Musk would already have been many million dollars richer (in Tesla options). Because already at the end of January the stock market capitalization of the electric car and energy company exceeded $ 100 billion for the first time, which means that the first stock exchange requirement for a high success bonus for the Tesla boss was realistically and soon reached. Now the average total value of all Tesla shares, calculated over a period of six months, must also be over $ 100 billion. And according to a report by the Reuters news agency, reaching this mark is imminent.
Tesla boss waves record bonus
The method of calculation means that Musk’s bonus can be due less than half a year after the Tesla’s $ 100 billion first-time market value. According to Reuters, the average over six months on Monday after the U.S. closed was already $ 96 billion. The agency did not make a forecast for when the threshold would be exceeded. But judging by the slope of a graphic of the Tesla average value published by her, it can only take a few days – almost independent of the current price development, because Tesla recently had a comfortable distance from the minimum target with a market capitalization of around $ 150 billion.
If CEO Musk gets his bonus payout, it would be the largest ever awarded to a US executive, according to Reuters – and it’s only the first of up to twelve. With each one, the Tesla boss can secure options for 1 percent of the Tesla shares outstanding in January 2018, a total of around 20.3 million shares. Musk only has to pay $ 350 per share, and the difference to the current market price is his mathematical premium. Reuters puts it at just under $ 800 per Tesla share on Monday for a total of $ 758 million. The next eleven levels are likely to be even higher.
Up to 55 billion for Tesla boss
The unprecedented bonus was approved by Tesla shareholders a good two years ago. At that time, Tesla’s market capitalization was $ 53 billion, Reuters recalls, and the company struggled with tight liquidity and Model 3 production delays. In addition to the stock exchange key figures, Musk also set operational targets for profit and sales, which Tesla has already achieved for the first tranche.
Just like the Tesla stock market target, operational thresholds are becoming increasingly demanding. But the reward is also increasing. For the next tranche, Tesla must reach and hold a market cap above $ 150 billion, again averaging both 30 days and 6 months; From there, it continues in increments of $ 50 billion each to the ultimate stock market target of $ 650 billion. But the exercise price for Musk’s next options remains the same, so that there is automatically an ever greater difference to the current price in favor of the Tesla boss. According to Reuters, according to previous calculations, he can secure a total of up to $ 55 billion in bonus in option form, but does not receive any fixed salary.
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