Elon Musk nears big payday

A payday windfall awaits Tesla chief executive Elon Musk.

He could be just a few months away from about a US$725 million profit, MarketWatch reports.

As part of a performance-award agreement in Musk’s 2018 compensation package, he stands to receive options to purchase shares if Tesla reaches specific benchmarks – a major one being a market capitalisation averaging US$100 billion for six months.

Tesla’s market value is US$143b, nearly seven times the market value of Ford Motor Co. and four times that of General Motors.

The six-month average is around US$97b.

Tesla expects to hit the US$100b milestone within the next two months, “if the value of Tesla’s closing stock price continues near the levels seen in late April 2020,” the company says.

After the Tesla board certifies the US$100b market cap average, Musk has the option to buy about 1.7 million shares at US$350.02 a share. Selling them at recent prices would gain him a paper profit around US$725 million.

Tesla shares have shown resilience amid the economic destruction caused by the COVID-19 pandemic, MarketWatch says.

The company is due to report first quarter results shortly – aiming to sell more than 500,000 vehicles in 2020.