Tesla CEO Elon Musk qualified on Tuesday for a payout worth an unprecedented $2.1 billion, his second huge achievement since May from the electric automaker after its massive stock surge.
On the same day, Tesla’s stock declined 3% in afternoon trading, crumbling a recent rally that has elevated the automaker’s market capitalization to almost $300 billion, larger than any other automaker.
Despite Tuesday’s stock decline, and importantly for Musk’s personal finances, the automaker’s six-month average market capitalization for the first time has reached $150 billion. That causes the vesting of the second of 12 tranches of options granted to Musk in his 2018 pay package to purchase Tesla stock at a discount. Musk, who is also the majority owner and CEO of the SpaceX rocket maker, gets no salary.
Even with Tuesday’s drop in Tesla’s stock, its six-month average market capitalization rose, due to the stock’s strong rally in recent months.
In early May, Musk’s first tranche vested after the automaker’s six-month average stock market value reached $100 billion.
Musk has already attainted targets related to Tesla’s financial growth that is also required in order to vest the newest options tranche.
Each tranche gives Musk the option to purchase 1.69 million Tesla shares at $350.02 each, less than a quarter of their current cost. At Tesla’s current stock price of $1,594, Musk would theoretically be able to sell the shares associated with the tranche that vested in May and the current tranche for a total profit of $4.2 billion, or almost $2.1 billion per tranche.
Musk’s first tranche was worth about $700 million in May when it vested, but its value has since boosted along with Tesla’s stock price.
The median compensation for Tesla workers in 2019 was about $58,000, a company filing showed.
Tesla’s stock has increased more than 500% over the past year as the company boosted sales of its Model 3 sedan.