The increase in Tesla Inc’s stock market value was beyond $1 trillion on Monday after the company landed its biggest-ever order from Hertz, a rental car company.
The stock rallied 12.7% following the news.
This is a huge advantage for Tesla’s CEO Elon Musk, the company’s largest shareholder.
With Tesla’s stock at a record high close of $1,024.86, Musk’s 23% stake in the recently minted trillion-dollar company is now worth about $230 billion.
That stake includes options worth more than $50 billion that have vested under Musk’s 2018 compensation package.
Musk’s own net worth is now at $289 billion, increasing more than $36 billion in last 24 hours.
Musk receives no salary at Tesla: his pay package provides 12 options tranches that vest when the company’s market capitalization and financial growth hit a series of increasing milestones. The options let Musk buy Tesla shares at $70 each, a discount of more than 90% from their existing price.
Last week, Tesla reported adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $3.2 billion, increasing 77% from the year before. That was enough to vest his seventh options tranche, worth over $8 billion as of Monday.
Tesla’s six-month average stock market valuation is above $650 billion, clearing the way for all 12 of the options tranches in Musk’s pay package, should the company reach increasingly higher targets associated to revenue and adjusted EBITDA for the rest of the five tranches.
