Elon Musk Scores Hat Trick of Tesla Compensation Goals Worth $23 Billion
Elon Musk has a hat trick of performance targets worth a combined $23 billion in new incentives, according to Tesla’s good quarterly report on Wednesday.
The world’s most valuable carmaker beat Wall Street projections for revenue and profit in the March quarter, as it hiked pricing in response to inflation and offset the impact of a Shanghai production closure.
Elon Musk’s latest pay raise, which must be approved by Tesla’s board of directors, comes just days after he made a $43 billion offer to buy Twitter Inc, with analysts speculating that he would sell Tesla stock to help fund the deal.
Elon Musk already is the world’s richest person
Tesla announced $18.76 billion in quarterly revenue and $5.02 billion in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). When combined with the prior three quarters’ results, this exceeds the benchmarks that trigger the vesting of the ninth through eleventh tranches of Musk’s 2018 compensation package’s 12 tranches of options.
Elon Musk stated on Wednesday that there are no ongoing conversations concerning further remuneration.
Elon Musk, who is also the founder and CEO of rocket company SpaceX, does not get a salary from Tesla. Tesla’s market capitalization and financial growth must meet a series of escalating objectives as part of his compensation package.
Each tranche provides Musk the option to purchase 8.4 million Tesla shares for $70.01, a 90 percent discount from the closing price of $977.20 on Wednesday. The three option tranches that will vest as a result of Tesla’s March-quarter performance may create a profit of roughly $23 billion, or over $7.7 billion per tranche, based on the stock’s current price.
Musk made $16.4 billion via the sale of around 10% of his Tesla stock late last year to pay tax withholding requirements connected to the exercise of stock options.
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