Tesla Inc's Elon Musk is one of the most innovative minds in the world of entrepreneurship and technology. He's also one of the richest men in the world, boasting a net worth of over $13 billion. And if all goes according to plan, he'll be over $1 billion richer very soon. How exactly?
Back in 2012, Musk was awarded 5.27 million stock options, which were tied to Tesla operational and market value targets. Per the agreement, if Musk met 10 operational goals, and 10 market value goals, he would be entitled to the stock options, which would be worth an roughly $1.6 billion at the opening of the market on Monday morning. Every time Musk met a pair of operational and market goals, he would be entitled to one-tenth of the stock options. According to a proxy statement filed last week, Musk has achieved six of the 10 operational goals, and eight of the 10 market value goals, leaving him with just six more goals to reach before he receives his massive payout.
Some of the operational milestones Musk has already achieved include completing the Model X engineering prototype, completing the Model X vehicle prototype, and completing the first Model X production vehicle. Some of the goals he has yet to achieve include completing the first Model 3 production vehicle, achieving a gross margin of at least 30 percent for four consecutive quarters, and achieving an aggregate production of 200,000 and 300,000 vehicles, respectively.
Musk appears well along his way to achieve those operational goals; Tesla delivered 23,000 vehicles in the first quarter, which would put the aggregate number of produced vehicles to 200,000, though the goal won't be considered achieved until Tesla's board confirms the numbers. In addition, Tesla said that they will begin production on the Model 3 in July, and that the company's annual vehicle output could soon reach 500,000.
As far as the market value goals are concerned, Musk needs Tesla to hit and maintain market values of at least $39.2 billion and $43.2 billion (he needs the company to maintain the $43.2 billion mark for six months). The company had a market value of $49.3 billion as of Thursday's close. Tesla briefly had a market value higher than General Motors, the United States' most valuable carmaker, earlier this month.
Though Musk is entitled to one-tenth of the stock options for every pair of operational and market goals he achieves, he has yet to exercise any options.