When it Rains, It Pours: Elon Musk Claims $800 Million Compensation
Tesla CEO, Elon Musk is about to claim $800 million as part of a huge compensation package he agreed to in 2018. The payment is the first of 12 possible performance-based stock option awards.
Tesla also announced that Musk was eligible to buy 1.69 million of its shares. This is because the company surpassed $20 billion in total revenue over the last four quarters and $100 billion in market capitalisation.
Tesla does not pay the CEO a salary but instead, his remuneration is the compensation plan. This “ensures [Musk] will be compensated only if Tesla and all of its shareholders do extraordinarily well.”
Musk’s agreement with Tesla is to pay $350.02 per share “strike price” to purchase the shares. This means he might be buying the 1.69 million share at about $591 million. This would give Musk a profit of about $770 million if he makes the purchase at the current market price.
Tesla shares were trading for $805.81 as at the close of the market on Thursday 28th May 2020. The Tesla shares that will accrue to Musk are currently worth about $1.6 billion
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If the current uptrend with Tesla’s stock price continues, and Musk steers the company in the way of additional revenue goals; he will be awarded an additional 20.3 million new Tesla shares at the same agreed price.
An annual proxy filing with the US securities and exchange commission confirmed the award. The document informs the company’s shareholders on what to expect at its annual meeting.
According to the filing, this year’s meeting will hold in person on 7th July 2020. Tesla says it might consider changing the details to protect its shareholders.
“[We] will continue to monitor public health and travel safety protocols required or recommended by federal, state, and local governments. If necessary or advisable to protect our personnel and stockholders, we will change the date, time, location and/or format of the 2020 Annual Meeting,” Tesla says.
Shareholders at the annual meeting will also vote to reelect Elon Musk and Tesla chairwoman, Robyn Denholm to the board of directors.
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