This week’s drop in Tesla shares hasn’t been enough to stop billionaire Elon Musk from reaching a $ 8.8 billion reward.
After trading yesterday (September 4), Musk crossed the final threshold to reach the third milestone in a multi-billion dollar bonus package that is conditionally tied to his financial situation and capitalization. by Tesla.
Shares of the world’s largest electric car maker have just had their worst week since July. After falling for three consecutive sessions and being blown away by nearly $ 90 billion in market capitalization from their highest peak All time established on Monday, it was not until yesterday afternoon that Tesla stock could recover.
But Musk still qualifies for an additional 8.44 million options to buy Tesla stock, worth about $ 2.9 billion. In May and July, he also conquered the challenges and received 16.9 million shares. If he exercised these options and immediately sold stocks, Musk would make billions of dollars.
Musk just met Musk’s 6-month and 30-day average capitalization of over $ 200 billion. Another goal is that Tesla achieves EBITDA (income before tax, interest and depreciation) in excess of $ 3 billion for four consecutive quarters. According to documents Tesla submitted to regulators on June 30, Tesla has also achieved this goal.
In the largest ever reward agreed between a CEO and the board of directors, Musk will receive a total of 20.3 million stock options, divided into 12 phases. According to Tesla’s calculations, if Musk achieves all of his goals, he will receive more than $ 50 billion in total.
The amount of billions of dollars reminds people of the huge bonuses that hedge fund managers earned during their glorious years rather than rewards for a CEO. On average, CEOs of companies in the S&P 500 index receive bonuses of around $ 15 million per year.
However, Tesla has always used a special mechanism by which the CEO will receive “huge” sums of money if certain goals are met. Shareholders are also not opposed to this, because if the company achieves its goals, they will also reap huge profits, so Musk bonuses are no problem.
By contrast, the average Tesla employee received only $ 58,455 in salary, bonuses and benefits last year. But the company also says all employees enjoy a stock bonus.
The Fremont, California-based company shares have more than quadrupled since the beginning of the year. Tesla’s market cap is more than $ 380 billion, much higher than that of other auto companies despite its much lower output. The momentum also increased Musk’s fortune by $ 68.6 billion, making him the 4th richest person in the world.
When it hit its all-time high on Aug. 31, Tesla’s stock rose nearly 500 percent from early 2020.