14 hours ago
SAN FRANCISCO (Reuters) – Elon Musk, chief executive of US company Tesla, is approaching taking the first tranche of $ 346 million in stock options under an unprecedented bonus package, after electric car maker shares have more than doubled in the past three months.
The shares of the company, which was founded by Mask, had risen nine percent to a record high yesterday. It needs to raise another six percent to reach its market value to $ 100 billion, and then maintain that level for an average of one month and six months alike in order to activate the entitlement to the first tranche of 12 options chips held by Musk to buy Tesla shares.
Mask has already achieved an operational objective that is also necessary to merit options.
In order for the holder of each of the following slides to be entitled under the terms of the 2018 package, he must continuously increase the company’s market value by $ 50 billion over the ten-year agreement period, provided that the billionaire earns the full package value if Teslas market value reaches $ 650 billion with the car maker achieving Electrical has several goals in terms of revenue and profits.
The total amount due to Mask, who also has a majority stake in SpaceX, the chief executive officer of the missile industry, will exceed any payments previously made by a US executive, according to Institutional Shareholders Services, a consultancy that had recommended investors to reject a package agreement Rewards at the time.
Mask does not receive any salary or cash rewards, only stock options are worth based on the market value of the company and achieving its growth goals.
“This is the precise definition of pay-for-performance … but is it the only individual who can act as an executive and achieve that value for shareholders?” Said Ian Keyas, director of Longnicker & Partners, a company that provides consulting services in the area of senior executive pay. That is the question. ”
The amount Musk might charge can be compared to that of Evan Spiegel, founder of Snape, in 2017 after the initial public offering of the social networking company, which amounted to $ 638 million. In 2018, Robert Eiger, CEO of The Walt Disney Company, received a grant of $ 149.6 million in bonus shares, including rewards for Disney’s acquisition of film and television assets for Fox 20th Century Film.
He transformed Teslas mask from a small car maker facing production problems to a global player in the field of electric cars, in factories in the United States and China. So far, he has managed to continue ahead of more established competitors such as Germany’s BMW and Volkswagen.
Last week, the market value of Tesla shares exceeded $ 89 billion, surpassing General Motors and Ford together for the first time, after surprising profits in the third quarter of the year, and progressed in a new factory in China, and deliveries of numbers from Cars are better than expected in the fourth quarter.
But many investors remain skeptical of Teslas ability to generate profits, cash flows and sustainable growth. Currently, the number of market analysts who recommend selling the company’s shares exceeds the number of those recommended to buy, and the stock is one of the most bet on the US market.
Tesla’s value (calculated on the basis of multiplying its number of shares by the share price) was about $ 53 billion, when shareholders agreed to the bonus package in January 2018, at a time when the company faced a liquidity crisis, production disruptions and intense competition. And he considered the goal very ambitious at the time, if it involved increasing the value of the company by up to ten times within ten years.
Last year, Mask achieved two major operating goals, with revenues in excess of $ 20 billion, and adjusted earnings before interest, taxes, depreciation, and amortization of $ 1.5 billion over four consecutive quarters.
Musk currently owns about 34 million shares in Tesla, equivalent to 19 percent of the company. The bonus package would allow him to buy an additional 20.3 million shares if all options were due.