Tesla CEO Elon Musk could make another $3 billion from his electric car company as its stock market valuation has reached $ 250 billion in average for the past six months.
This is because Musk could activate his fourth in the 12 tranches, included in the billionaire's payment package in 2018. This would again allow him to buy discounted Tesla shares. In each tranche, the CEO could buy 8.44 million shares at only a super low price of $70 each as Tesla stocks now cost $420 each.
GRUENHEIDE, GERMANY - SEPTEMBER 03: Tesla head Elon Musk talks to the press as he arrives to to have a look at the construction site of the new Tesla Gigafactory near Berlin on September 03, 2020 near Gruenheide, Germany. Musk is currently in Germany where he met with vaccine maker CureVac on Tuesday, with which Tesla has a cooperation to build devices for producing RNA vaccines, as well as German Economy Minister Peter Altmaier yesterday.
To initiate the fourth part of his payment package, Tesla must be able to reach income and profitability targets, which could have been achieved based on the company's third quarter report. Reuters reported that the CEO's reward package includes some possible offsets on stocks based on operating targets and market capitalization.
If Musk would sell his company shares earned in the past three tranches as well as the upcoming fourth one, he could earn $ 11.8 billion combined revenue or about $3 billion dollars for each tranche.
In May, the CEO's first tranche has a stock value of about $700 million when it vested, although its market value increased along with the company's overall stock price.
Musk's payment package surpasses all that were granted to any top U.S. executive in the past. It became controversial after shareholders approved it. Based to a company filing, Tesla employees had a median compensation of around $58,000 in 2019.
Tesla Stocks increase 400% to nearly $400 billion market value
Last week, the electric carmaker announced the company has delivered a record of 139,300 EVs in the last quarter, so investors are currently waiting for the Tesla's third quarter financial report. As its Model 3 sales increased, Tesla's stock already surged 400% in 2020 gaining about $400 billion stock market value.
Tesla's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) have reached $4.42 billion, which was only $4.5 billion short before Musk could activate his next payment tranche. EBITDA is a factor considered to measure a company's overall financial performance. It is also used as a net income alternative, but it can also be misleading because it excludes capital investment cost such as plant, property, and equipment.
Read also: Elon Musk Hints Major Tesla Software Updates to Extend 12V Battery Life and MORE
Elon Musk Net Worth
Musk became the fifth person in the world to reach a net worth of $100 billion. However, due to some movements in the stock market his real-time net worth as of this writing is at $89.3 billion.
He suffered a $16.3 billion in September as Standard & Poor did not include Tesla on its 500 list of top major U.S. companies.
His multi-faceted investments range from his electric automaker Tesla to commercial space company SpaceX. However, his earnings mostly come from Tesla, in which he owns 21%, but half of it was made as loan collateral.
While SpaceX has a market value of around $36 billion, Tesla's current market value is now at $400 billion. Once his fourth payment tranche is activated, he will become $3 billion richer or more. Of course, Tesla is expected to do well in the stocks market with the great sales it had in the third quarter of 2020.
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Written by CJ Robles
