Tesla Tops Up All-In Bet on Musk With $2.6 Billion Option Award
It is the Elon Musk of corporate pay deals, a cocksure, all-or-nothing moonshot into history. Little wonder, then, that it is for none other than Elon Musk. Tesla Inc. granted the billionaire founder a $2.6 billion award, the largest-ever of its kind, underscoring the company's outsize ambitions and how intimately connected its future success is to Musk
From article, (Tesla Inc. granted the billionaire founder a $2.6 billion award, the largest-ever of its kind, underscoring the company’s outsize ambitions and how intimately connected its future success is to Musk. If fully vested over a decade, stock options would net him as much as $55.8 billion. Along the way, nothing would be guaranteed -- zero salary or cash bonuses.
The audacious award outlines a plan for Tesla to become one of the world’s biggest companies, which would make Musk perhaps the richest man on the planet in the process, but without as detailed a road map to get there as was provided with his last award. This, too, is very Musk-like -- set big-picture, moonshot end goals, particulars be damned.
The award granted Jan. 21 appears to be Tesla’s way to put to rest questions of Musk’s future at the company, since the award is contingent on him remaining chief executive officer, or executive chairman and chief product officer. The plan laid out in a statementTuesday leaves open the possibility for the company to “bring in another CEO who would report to Elon.”
While Musk’s 2012 grant was linked to development and production of electric cars, his new package of 20.3 million options is tied solely to financials -- raising Tesla’s market value to $650 billion, roughly in line with Amazon.com Inc., and boosting either revenue or adjusted earnings before interest, taxes, depreciation and amortization. The grant vests in 12 increments if both market value hurdles and either one of the financial goals are met. The grant will require shareholder approval at a meeting in March.
The opportunity to acquire more shares will also enable Musk to continue to use his Tesla holdings to back personal loans, which he’s done for several years. Musk had 11.5 million shares pledged as collateral as of April 20, a filing shows.
If the award fully vests, Musk would own a 28 percent stake in the company worth about $184 billion, vaulting him to the top of the Bloomberg Billionaires Index. Amazon’s Jeff Bezos currently sits atop the index with a $111.5 billion net worth as of Monday’s close in New York. Musk’s stake in SpaceX constitutes about half of his current net worth of $21.5 billion.)
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