Tesla CEO Elon Musk has cashed in the first portion of an incentive-based stock options payout for keeping the company’s market capitalization at $100 billion along with hitting revenue milestones. The award is valued at about $775 million.
CNBC reports that Tesla CEO Elon Musk has earned the first part of a huge incentive payout according to documents filed with the Securities and Exchange Commission on Thursday. The payouts are linked to 1.7 million shares of Tesla which are valued at around $775 million based on Thursday’s closing market value.
Tesla shares closed at $805.81 on Thursday and options have a strike price of $350.02. Thursday’s filing also set a day of July 7 for the company’s annual shareholders meeting, stating: “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.”
Musk has earned the first portion of stock options for keeping Tesla’s market capitalization at $100 billion on a 30-day six-month trailing average. A 2018 regulatory filing outlined the conditions for the payout which included Tesla hitting trailing-fourth-quarter revenue of $20 billion or EBITDA (minus stock-based compensation) of $1.5 billion for Musk to get the stock award.
Musk owned approximately 18.5 percent of Tesla as of May 1 according to FactSet, an ownership stake worth around $24 billion. Thursday’s proxy filing revealed that Musk’s stake in the company had risen to 20.8 percent, a total of 38.7 million shares, including 18.5 million used as collateral for the CEO’s personal debt. Musk’s full award is set to vest over 12 tranches with different milestone requirements reaching up to $650 billion in market capitalization for Tesla.
Since the Wuhan coronavirus pandemic began, Tesla has focused heavily on reopening its manufacturing facilities. Breitbart News recently reported that Tesla plans to open its plant in Fremont, California, and has told workers their options are to violate the state’s stay-at-home orders and come to work, or stay home and forgo payment and benefits.
In an email obtained by the Guardian from Tesla’s management to its workers, the firm stated: “Choosing not to report to work may eliminate or reduce your eligibility for unemployment depending on your state’s unemployment agency.”
Tesla workers told the Guardian that they feel that Tesla’s management is using intimidation tactics in order to force them to return to the job by threatening to cut their pay and unemployment benefits.
Breitbart News recently reported that Tesla has sued local authorities for attempting to enforce shutdown orders. In a post to the company blog on Saturday, Tesla stated that the county’s position had left it no choice but to take legal action to ensure that Tesla and its employees could return to work.
Source: Breitbart
