Tesla passes $100B, teeing up big payout for Musk
Musk could get stock options that are worth stock option package that's worth close to $400 million
DETROIT -- The meteoric rise of Tesla shares that pushed the company's value over $100 billion could turn into a supercharged payday for CEO Elon Musk.
Stock in Tesla Inc. rose another 6.3% Wednesday, pushing the market value of the electric vehicle and solar panel maker past a critical milestone in Musk's pay package. He could get stock options that are worth stock option package that's worth close to $400 million.
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Tesla shares were trading at $581.40 during the afternoon, giving it a market capitalization of close to $105 billion.
Shares have tripled in value since May, meaning Tesla's market capitalization now exceeds the value of Ford and General Motors, combined.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TSLA | TESLA INC. | 357.09 | +11.93 | +3.46% |
For Musk, hitting $100 billion in market value triggers an option to buy 1.69 million shares of Tesla stock for $350.02 per share. If he sells the shares, he would make more than $391 million.
But for the options to vest, the market capitalization has to average above $100 billion for the next six months, and it has to be above $100 billion for the next 30 business days, according to the compensation packages contained in company filings with the U.S. Securities and Exchange Commission.
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Musk could get more stock payouts for every additional $50 billion increase in market capitalization. By meeting ambitious market capitalization and operational milestones, he could earn more than $50 billion over the next decade if that value hits $650 billion.
In the third quarter, Tesla posted a surprising $143 million profit, raising hopes that the company, which also makes battery storage units, could finally be turning the corner to profitability.
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But Tesla has posted mostly losses during its first decade as a publicly held company, and it lost $1.1 billion during the first half of last year. The company reports fourth-quarter results on Jan. 29.
Earlier this year the company said it delivered a record of about 112,000 vehicles in the fourth quarter and about 367,500 for the full year in 2019.
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Tesla, based in Palo Alto, California, had earlier projected deliveries of between 360,000 and 400,000 units worldwide.
Also, on Wednesday, the state of Michigan confirmed that Tesla had reached a lawsuit settlement allowing it to sell and service vehicles in the state.