Just a few months ago (March 2020), Tesla CEO Elon Musk was ranked No. 31 on Forbes’ Billionaires List, with a net worth just under $25 billion.
Elon Musk is now $2.1 billion richer and happily 5th richest person in the world.
Tesla Stock meteoric rise has surely bagged CEO Elon Musk $2.1 billion, but this is not the end. There are many more billions of dollars payouts in store if the stock continues to rise.
The $2.1 Payout Explained!
Think of it like a little game the CEO and the company plans to encourage him to work harder.
Tesla founder Musk does not pay a fixed salary as company boss. Instead, he receives stock options that are linked to the achievement of certain goals. One thing has been achieved: The average market value of the electric car maker has been over $ 150 billion for six months. This is why he is bagging $2.1 billion this week.
On Tuesday, 21 July 2020, the electric car giant reached an average market value of $ 150 billion over six months. This secured Musk’s claim to the second of a total of twelve agreed option tranches.
TheStreet explains this better: Based on Tesla’s average market capitalization over the past few months, Musk earned the second of twelve potential payouts tied to financial and operational milestones. The payouts are tranches of stock options that, if exercised, would amount to billions: Each tranche gives Musk the option to buy 1.69 million Tesla shares at the discounted price of $350.02 each; if exercised today at Tesla’s closing price of $1,568.36 per share, the total stock he’s earned would be worth $4.2 billion, or $2.1 billion per tranche.
The 49-year-old Elon Musk has no fixed salary but owns about 21% of Tesla. It is only paid in the form of the agreed options, provided the requirements are met. The hope of strong car sales gives the Tesla course a powerful boost. Last year it grew by more than 500 percent.
Musk fortune has nearly tripled since March 2020, skyrocketing to $74.2 billion at the close of trading Monday.
Musk first debuted on Forbes’ 400 Wealthiest Americans List in 2012 in 190th place with a net worth of $2.4 billion. How amazing.