Musk close to earning first $466m tranche of options in record package
SAN FRANCISCO : Tesla chief executive Elon Musk is coming close to earning the first US$346 million (S$466 million) tranche of options in a record-breaking pay package, after the electric vehicle-maker's stock more than doubled in the last three months.
Shares surged 9 per cent to a record high on Monday. They need to rise another 6 per cent to put Tesla's stock market value at US$100 billion and then be sustained at that level for both a one-month and six-month average to trigger the vesting of the first of 12 tranches of options granted to Mr Musk to buy Tesla stock.
Last week, Tesla's stock market value hit nearly US$89 billion, eclipsing the combined sum of General Motors' (GM) and Ford's for the first time.
Mr Musk has already hit an operational target necessary for the options to vest. He will earn the full package if Tesla's market capitalisation reaches US$650 billion and the electric carmaker achieves several revenue and profit targets.
A full payoff for Mr Musk would surpass anything previously granted to US executives, according to Institutional Shareholder Services.
"This is the very definition of pay for performance," said Mr Ian Keas, senior director at Longnecker & Associates, an executive compensation consulting firm.
"But is he the only individual that could serve in that seat as chief executive and deliver that value to shareholders? That is the billion dollar question."
Mr Musk owns about 34 million Tesla shares, equivalent to 19 per cent of the company. - REUTERS