This would take the form of options to buy 1.7 million shares of the Stock at a reduced price. The net value of these options – the difference between the stock price and the strike price –– would be more than $ 350 million for this option block only.
The company has already achieved the sales and earnings target it needs for this first payday. Now it only takes an average market value of $ 100 billion within six months, including the last 30 days.
The stock passed the $ 500 mark for the first time in Monday's trading on Monday, and its market valuation reached $ 95 billion at the close on Monday. Further gains are expected as some analysts have already raised their stock price targets this week.
Musk already owns 34 million Tesla shares and another 4.5 million options that he could exercise today if he so wished. This gives him control over about 22% of the company.
Under his current compensation package. he could be given options to buy another 20.3 million shares, including this first block of 1.7 million options.
To take advantage of all options, Tesla would have to generate sales of $ 175 billion and an operating profit of $ 14 billion. Both measures would be above the value of GM from 2018.
Tesla had no comment that Musk was approaching its first distribution from the current compensation package. However, Tesla's board of directors defended the package when it was first introduced in 2018. This was a good move for the company as well as for the shareholders and Musk.
"We believe that Tesla has a unique opportunity to further increase shareholder value," said the Management Board's statement at the time. "Our aspirations may seem ambitious to some and impossible to others, and that is the intention. We like to set challenging, hard-to-reach goals for ourselves and then focus our efforts to achieve them, so we reasoned." new award for track gates and why we gave Elon the opportunity to benefit in a way that is commensurate with the difficulty of achieving these goals. "
The shareholders approved the package with 73% of the voting shares.
Musk has achieved the growth targets of previous compensation packages pretty well. Tesla achieved 90% of the goals set in its 2012 package, resulting in the 4.5 million options he currently holds. He may still be eligible for the final 527,000 options allowed under this package if Tesla reaches a final profit target before August 2022.