(Reuters) – Tesla CEO Elon Musk appeared to be eligible for a $700 million pay cut on Monday, just three days after saying the electric car company’s stock price was too high.
Tesla Inc TSLA.O shares rose more than 8% on Monday, bringing Tesla’s market capitalization to $141.1 billion at the close. More importantly for Musk, according to Refinitiv data, Tesla’s stock market value has reached a six-month average of $100.2 billion.
The achievement of a six-month average of $100 billion results in the vesting of the first of 12 tranches of options granted to the billionaire to purchase Tesla stock as part of a 2018 pay package. Musk has already met two other requirements by exceeding a one-month average market cap of $100 billion and meeting a growth target.
Each tranche gives Musk the option to purchase 1.69 million Tesla shares at a price of $350.02 per share. Musk could theoretically sell the shares for a profit of $694 million at Tesla’s closing stock price of $761.19.
Tesla’s stock dropped 10% as a result of that tweet, shocking investors. Tesla, whose California factory is closed due to coronavirus-related lockdowns, reported its third consecutive quarterly profit last week.
Musk, who is also the majority owner and CEO of SpaceX, receives no salary or cash bonus, only options that vest based on Tesla’s market cap and revenue and profit growth milestones.
A total payoff of all tranches would be greater than anything previously granted to executives in the United States.
When Tesla unveiled Musk’s package in 2018, it stated that he could earn up to $55.8 billion if no new shares were issued. Tesla has since issued shares to compensate employees, and it sold $2.7 billion in shares and convertible bonds last year.
Musk’s subsequent option tranches would vest at $50 billion increments of Tesla market capitalization over the course of the 10-year agreement, with the billionaire earning the entire package if Tesla’s market capitalization reaches $650 billion and the high-tech vehicle maker meets several revenue and profit targets.
The total payoff of all tranches would be greater than anything previously granted to executives in the US.
When Tesla unveiled Musk’s package in 2018, it stated that if no new shares were issued, he could earn up to $55.8 billion. Tesla has since issued shares to employees as compensation, and last year it sold $2.7 billion in shares and convertible bonds.
Over the course of the 10-year agreement, Musk’s subsequent option tranches would vest at $50 billion increments of Tesla market capitalization, with the billionaire earning the entire package if Tesla’s market capitalization reaches $650 billion and the high-tech vehicle maker meets several revenue and profit targets.
Elon Musk, Tesla’s co-founder and CEO, has a fascinating history with bitcoin, complete with bizarre and sometimes sarcastic tweets. In January 2020, he stated that “bitcoin is not my safe word,” and nearly a year later, he stated that “bitcoin is my safe word.”
While the concept behind these tweets has mostly remained a mystery, or perhaps a joke, he has also discussed the future of the primary cryptocurrency more seriously. Musk previously stated that bitcoin will not replace fiat currencies but will play a role in the financial system.
Surprisingly, he has been more open to and supportive of another cryptocurrency, Dogecoin. His Twitter bio read “former CEO of Dogecoin” until recently, and some of his tweets boosted the asset’s price by up to triple digits.
