Elon Musk poised to draw over $700 million despite COVID-19 turmoil
Musk has an option to purchase 1.7 million common stock of Tesla at $350.02 apiece if the company achieves this key milestone
April 29, 2020 / 12:29 PM IST
Elon Musk, the founder of electric automaker Tesla, is inching closer to a big payday that could see him netting over $700 million in profits if the company achieves a key milestone.
As part of a performance-award agreement in Musk’s 2018 compensation package, the Tesla honcho will have an option to purchase shares of the automaker if the company maintains an average market capitalisation of $100 million for six months.
At Tuesday's closing, the market capitalisation of Tesla stands at $141.8 billion. Its average market cap for the last six months is about $96 billion, as per a Reuters report.
Tesla said that it will hit the $100 billion milestone within the next two months, "if the value of Tesla’s closing stock price continues near the levels seen in late April 2020," it said in a filing
If the company achieves the milestone, Musk will be eligible to purchase 1.7 million common stock of Tesla at $350.02 apiece. This would equate to a nifty profit of $712.47 million, as per Tuesday's closing price of $769.12.
The shares of Tesla are on a fairytale run in April rising 46.78 percent so far. This is despite employees getting slammed with pay cuts and hundreds of hourly workers getting furloughed due to factory closures in the wake of the novel coronavirus.
The stock has gained 85 percent so far this year, in comparison to losses of 11 percent and 15 percent for the S&P 500 index and the Dow Jones Industrial Average.
The company is scheduled to report first-quarter results on April29.