As Tesla’s share price climbs, CEO Elon Musk is on the verge of a second award, worth nearly $1.5 billion. Tesla’s share price continued to rise this week, hitting a new high of $887 on Tuesday, pushing Tesla’s market value to $159 billion. That brings CEO Musk one step closer to getting a second prize.
Musk does not have any salary or cash bonuses under Musk’s compensation package for the next decade approved by Tesla’s special shareholders’ meeting in March 2018. If he can lead Tesla to many of its expected goals, he could get about 20.3 million shares, or about 12 percent of Tesla’s shares on January 19, 2018.
Moreover, there is an incentive clause in the programme. Tesla’s market capitalisation must reach $650 billion over 10 years, but the target is divided into 12 phases, with an initial market capitalisation target of $100 billion, followed by an additional $50 billion each. Musk receives about 1.69 million stock rewards each time he achieves his goal.
Musk reached his first milestone earlier this month, when Tesla’s market value crossed the $100 billion mark. Now, Tesla has added more than $50 billion to its market value to $100 billion, and if it meets its operating targets, Musk will unlock the second batch of rewards, or 1.69 million shares. At current share prices, the 1.69 million shares are worth nearly $1.5 billion.
The $150 billion market capitalisation now puts Tesla well ahead of the big three U.S. auto companies. In fact, Tesla’s market capitalisation now exceeds that of General Motors ($49 billion), Ford ($36 billion) and Fiat Chrysler Automobiles ($18 billion).
Analysts say that if Tesla remains financially strong in the future, it may not be long before it surpasses Toyota, which is currently worth $229 billion, to become the world’s most valuable car company.