Elon Musk Might Qualify For A $750 Million Payday – TOMORROW

By on April 28, 2020 in ArticlesBillionaire News

It's that time again – when billionaire Elon Musk is once again closer to a huge payday as part of his unusual and potentially incredibly lucrative compensation plan for his work as the CEO of Tesla. If all goes well with Tesla's quarterly earnings – which are released tomorrow – Elon could earn a $750 million bonus.

Musk's unusual payment structure was set up two years ago. He receives NO BASE SALARY at all for his work as CEO. Instead, Musk's potential pay comes in the form of 12 stock option grants that come if various financial performance milestones are met. If he doesn't meet any of these milestones, he gets nothing. If the company hits every milestone, Musk could hypothetically end up owning a hair under $60 billion worth of Tesla stock.

The very first milestone triggers if the company maintains a market cap average of at least $100 billion over six months. This could happen tomorrow.

With Tesla's recent surge putting the company's market cap at about $140 billion, that six-month average is coming up much sooner than many analysts originally predicted. As of this writing, the company's six-month stock market value average is right around $96 billion, and with the company's quarterly earnings report coming out tomorrow, some are expecting one more surge to push it over the threshold. 

If that happens, the first tranche of Musk's 12-tranche payment plan would be activated, giving him the opportunity to purchase 1.69 million Tesla shares at $350.02 per share. With Tesla's current market stock price now at almost $800 per share, that would be an incredible windfall for the CEO, valued at approximately $758 million (and, obviously, even more if Tesla's stock continues to go up).

Win McNamee/Getty Images

Investors will be watching the Tesla quarterly report closely for signs that recovery from the coronavirus pandemic may already be happening in China, where resumed production at Tesla's Shanghai plant might be bringing revenue back up and indicate the prospects for additional recovery in the future. Here in the US, Tesla recently announced it was placing all "non-essential" workers on furlough and suspending production at their American plants in order to help slow the spread of the coronavirus, which has also had the side-effect of causing demand for new cars to collapse all over the country. If they like what they see, and Tesla's six-month stock market value average goes up by at least another $4 billion, Musk will finally see his Tesla payment agreement begin to pay off. 

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