![\"Elon](\"https:\/\/techcrunch.com\/wp-content\/uploads\/2020\/02\/GettyImages-1175368064.jpg?w=730&crop=1\")
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Tesla’s <\/a> board certified a financial milestone that unlocks the first tranche — worth more than $700 million — of an unprecedented multi-billion-dollar pay package for CEO Elon Musk, according a document filed Thursday with the Securities and Exchange Commission.<\/p>\n The milestone allows Musk to purchase the first grouping or tranche of nearly 1.69 million shares at a steep discount. Tesla shares closed Thursday at $805.81, putting the value at $775 million. Musk is able to buy those stock options at a price of $350.02 per share.<\/p>\n “As of the date of this proxy statement, one of the 12 tranches under this award has vested and become exercisable, subject to Mr. Musk’s payment of the exercise price of $350.02 per share and the minimum five-year holding period generally applicable to any shares he acquires upon exercise,” the SEC document<\/a> reads.<\/p>\n The compensation plan approved by shareholders in 2018 consists of 20.3 million stock option awards broken up into 12 tranches of 1.69 million shares. These options will vest in 12 increments if Tesla hits specific milestones on market cap, revenue and adjusted earnings (excluding certain one-time charges such as stock compensation).<\/p>\n When the board and shareholders approved the package, Musk was theoretically able to earn nearly $56 billion if no new shares were issued. However, last year Tesla sold $2.7 billion in shares and convertible bonds, Reuters reported<\/a> at the time.<\/p>\n To access the first tranche of stock options, Tesla’s market value had to reach a six-month average of $100.2 billion and either $20 billion in annual revenue or $1.5 billion in adjusted EBITDA. To meet the next milestone, Tesla’s market cap must increase another $50 billion in value and $35 billion in revenue or $3 billion in adjusted EBITDA.<\/p>\n The board certified the market cap and revenue milestone. The other operational milestone relating to $1.5 billion adjusted EBITDA has been achieved but is subject to formal certification by the board, according to the SEC filing.<\/p>\n Image Credits:<\/strong> Screenshot\/SEC filing<\/p>\n<\/div>\n The board must certify that each milestone has been achieved before Musk can exercise those stock options. To unlock every tranche, Tesla’s market cap will have to reach $650 billion.<\/p>\n Musk has never accepted a salary. Instead, he opted for, and the shareholders approved, equity-based compensation plans. In a previous equity compensation plan, Musk was awarded stock options worth about $78 million in 2012 that vested only after Tesla hit production and market value milestones.<\/p>\n The 2018 CEO compensation plan not only ensured Musk would a be part of Tesla for the next decade, it also put an emphasis on market cap and revenue, not necessarily profitability.<\/p>\n Tesla’s annual shareholder meeting is scheduled for July 7, according to the document.<\/p>\n Tags:<\/b> Kirsten Korosec<\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":" Tesla’s board certified a financial milestone that unlocks the first tranche — worth more than $700 million — of an unprecedented multi-billion-dollar pay package for CEO Elon Musk, according a document filed Thursday with the Securities and Exchange Commission. The milestone allows Musk to purchase the first grouping or tranche of nearly 1.69 million shares at … Continue reading Tesla board certifies Elon Musk’s payday worth more than $700 million<\/span><\/a> Continue Reading <\/div>\n![\"Tesla](\"https:\/\/techcrunch.com\/wp-content\/uploads\/2020\/05\/Screen-Shot-2020-05-28-at-2.40.47-PM.jpg\")
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Kirsten Korosec<\/p>\n
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