Tesla Inc. TSLA CEO Elon Musk has qualified for two options payouts, worth a combined $11 billion, after the automaker’s quarterly results hit targets, Reuters reported Monday.
What Happened: Tesla on Monday reported first-quarter earnings that beat Street estimates. The electric vehicle maker reported quarterly revenue of $10.39 billion and adjusted EBITDA of $1.84 billion.
The figures surpassed milestones that triggered the vesting of the fifth and sixth of 12 tranches of options granted to Musk in his 2018 pay package to buy discounted Tesla shares, according to the Reuters report.
Musk’s compensation plan gives him 20.3 million stock option awards, divided into 12 tranches of 1.69 million shares each.
Each time Tesla hits a certain milestone in terms of market cap, revenue, and adjusted earnings, Musk is allowed to purchase about 8.4 million shares at the discounted price of $70 per share — adjust for the 5-to-1 stock split. The tranche is locked for five years and thus Musk can't immediately sell these shares.
In its quarterly report, Tesla said it incurred an expense of $299 million in the latest quarter related to Musk's pay package “driven by an increase in market capitalization and a new operational milestone becoming probable.”
See Also: Online Backlash Percolates Over Elon Musk's 'SNL' Hosting Gig
Why It Matters: Musk does not receive a salary at Tesla. Instead, his pay package requires Tesla's market capitalization and financial growth to hit a series of rising targets.
Tesla is now the world’s most valuable car maker with a market capitalization of more than $700 billion, compared with Toyota Motor Corporation’s TM market cap of $210 billion.
Musk is currently the world’s second-richest person with a net worth of $189 billion, as per the Bloomberg Billionaires Index, with the top spot going to Amazon.com Inc. AMZN CEO Jeff Bezos, who has a net worth of $199 billion.
Price Action: Tesla shares closed 1.2% higher in Monday’s regular trading session at $738.20.
Read Next: Tesla Sold $272M Bitcoin In Q1 — Musk Responds To Portnoy's Allegations Of Pump And Dump
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