DETROIT (AP) — Tesla confirmed Thursday that CEO Elon Musk will get the first tranche worth nearly $770 million of a stock-based compensation package triggered by the company meeting several financial metrics.
The electric car and solar panel maker’s board certified that Musk earned the big payout, according to a filing with the U.S. Securities and Exchange Commission. The filing says Musk can buy 1.69 million shares of Tesla stock for $350.02 each, but it wasn’t clear whether he had exercised the stock options. His payout is based on the difference between the option price and Thursday’s closing share price of $805.81.
Musk earned the options as part of an audacious compensation package approved by the board in 2018.
According to the filing, the board certified that Tesla had reached the milestones by hitting $20 billion in total revenue for four previous quarters and a total market value of $100 billion. The company also reached $1.5 billion in adjusted pretax earnings, but that must still be certified by the board, the filing said.
Musk has to hold the stock for a minimum of five years, under the terms of the compensation package.
Musk can afford to wait before cashing in on his latest windfall, given his wealth is estimated at $39 billion by Forbes magazine.
All told, the incentives approved by Tesla’s board in 2018 consist of 20.3 million stock options that will be doled out in 12 different bundles if the company is able to reach progressively more difficult financial goals. It’s one of the biggest corporate pay packages in U.S. history.
In order for Musk to receive all 20.3 million stock options, Tesla will have to generate adjusted annual earnings of $14 billion on annual revenue of $175 billion coupled with a market value of $650 billion. In the past four quarters, Tesla, which is based in Palo Alto, California, has reported adjusted earnings totaling $3.6 billion on revenue totaling $26 billion.