Tesla chief executive Elon Musk has qualified for a payout worth an unprecedented US$2.1bn, his second jackpot since May following the electric car maker’s massive stock surge, media reports said.
As just-auto.com reported at the beginning of July 2020, Tesla’s market capitalisation now exceeded that of Toyota, making it the most valued carmaker in the world. A recent jump in Tesla’s share price put its market capitalisation at US$207.7bn versus $171.8bn for Toyota (its share price not helped by the recent slump and deterioration in Japan’s vehicle market and industry).
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A Reuters report said, though it had dipped a little this week, a recent rally in Tesla’s stock had elevated market capitalisation to almost $300bn, still larger than any other carmaker.
Tesla’s six-month average market capitalisation had, for the first time reached $150bn which triggered the vesting of the second of 12 tranches of options granted to the billionaire in his 2018 pay package to buy Tesla stock at a discount.
Musk, who is also majority owner and CEO of the SpaceX rocket maker, does not draw a salary, Reuters noted.
Even after this week’s decline in the stock, Tesla six month average market capitalisation rose, thanks to the strong rally in recent months, the report noted.
In early May, Musk’s first tranche vested after Tesla’s six month average stock market value reached $100bn, Reuters said.
Musk had already achieved targets related to Tesla financial growth which were also required in order to vest the latest options tranche.
Reuters said each tranche gives Musk the option to buy 1.69m Tesla shares at $350.02 each, less than a quarter of their current price. At Tesla’s current stock price of $1,594, the CEO would theoretically be able to sell the shares related to the tranche that vested in May and the current tranche for a combined profit of $4.2bn, or almost $2.1bn per tranche.
Musk’s first tranche was worth about $700m in May, when it vested, but its value has since increased along with Tesla’s stock price, the report said.
For comparison, the median compensation for Tesla employees last year was about $58,000, Reuters noted, citing a company filing.
Tesla’s stock has surged more than 500% over the past year as the company increased sales of its Model 3 sedan.
Following higher than expected second quarter vehicle deliveries, some investors believe Tesla might report a profit in its second quarter report due Wednesday night (GMT) after US stock exchanges close.
That would mark four consecutive profitable quarters, a first for Tesla and a key hurdle for it to be added to the S&P 500 index, Reuters said.
Analysts on average expect a $240m loss for the quarter, the news agency said, citing Refinitiv.
A month ago, analysts expected a loss of almost $340m, the report added.
