Musk, who already owns about 20% of the business, does not receive a simple salary or bonuses. Under a stock compensation plan approved by shareholders in 2018, it can receive up to 20.3 million stock options by 2028 if the company achieves various market and operational value objectives.
It has already achieved the first two operational objectives, but so far it has not yet achieved the market value objective of $ 100 billion on average over a six-month period.
Tuesday, You’re here((TSLA) shares were worth $ 144 billion, which is worth more than any automaker in the world except Toyota((TM). It is now more precious thancombined market value of Volkswagen((VLKAF), General Motors((GM), Ford((F) and Fiat Chrysler((FCAU). This brought the six-month average just above the $ 100 billion threshold.
When Musk obtains the first tranche of 1.7 million options, he can exercise them at a cost of $ 350.02 each, although executives generally do not exercise options when they are first granted. The value of these options, less this cost, is approximately $ 720 million.
Of course, even that large salary is modest compared to the $ 26.4 billion worth of Tesla stocks Musk already owns. But if he gets the 20.3 million options, they could make Musk the richest man in the world.