The electric-vehicle manufacturer’s 2018 executive-compensation package set out several milestones for Musk to reach in order to be paid in Tesla shares. Musk achieved four targets, granting him the right to acquire 33.6 million shares at $70 apiece. Each tranche grants Musk the right to purchase 8.6 million Tesla shares.
Tesla’s first-quarter revenue of $10.39 billion and earnings before interest, taxes, depreciation, and amortization of $1.84 billion surpassed the targets to unlock Musk’s fifth and sixth tranches of options.
Tesla said in its SEC filing that based on its business trajectory, it’s likely that two more milestones will be reached.
Those six tranches of options payouts give Musk the right to purchase 50.6 million shares of Tesla at an exercise price of $70.01 per share. Tesla traded just below $700 per share on Monday, making the options package worth $35.3 billion. Musk’s cost to acquire the options is $3.5 billion, giving him an immediate profit of about $32 billion.
Musk still has another 50.6 million shares of Tesla stock that he could be granted if he reaches the remaining six targets. The total package of 101.2 million shares would be worth about $71 billion at current prices.
Musk is required to hold the shares for a minimum of five years. (Here’s a breakdown of Musk’s compensation incentive package and all 12 tranche requirements.)