Tesla is making Elon Musk a lot richer without paying him a dime.
FILE PHOTO: Tesla Inc CEO Elon Musk attends the World Artificial Intelligence Conference in Shanghai, China August 29, 2019. REUTERS/Aly Song
The controversial chief executive, who is also the majority owner and CEO of rocket maker SpaceX, recently testified that he did not have a lot of cash as he successfully defended himself in a defamation lawsuit. He previously has taken loans using his Tesla shares as collateral. Tesla shares have climbed about 400% since early June, helped by the company’s better-than-expected financial results and ramped-up production at its new car factory in Shanghai.
The options Musk was awarded in 2018 vest incrementally based on targets for Tesla’s stock market value and its financial performance. The market capitalization would have to sustainably rise by $50 billion increments over the agreement’s 10-year period, with the full package payout reached if the market cap reaches $650 billion, as well as the company’s meeting revenue and profit targets.
Tesla was valued at about $52 billion when shareholders approved the pay package in March 2018, a time when the company faced a cash crunch, production delays and increasing competition from rivals.
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