US, WASHINGTON (ORDO NEWS) — Tesla confirmed that Elon Musk received the right to the first tranche – the corresponding document was submitted to the Securities and Exchange Commission on Thursday. Musk received about 1.7 million shares of Tesla, which are valued at approximately $ 775 million based on today’s market value at the close. Tesla shares closed Thursday at $ 805.81.
An application was submitted on Thursday, where the date of the annual meeting of shareholders of the company was also determined – July 7. The document states that, at the date of application, one of the 12 tranches of the premium became payable at an option price of $ 350.02 per share and a minimum five-year holding period, usually applied to any shares that are acquired in the exercise of the option.
Tesla shareholders tied Mask’s remuneration to the company’s performance in March 2018. The $ 2.6 billion option was planned to be transferred to the businessman in 12 tranches over ten years. At the same time, in order to receive all tranches, Tesla’s market value must grow to $ 650 billion, and the electric vehicle manufacturer will achieve several targets for revenue and profit.
In this case, Musk does not receive a salary or cash bonus, only options that are based on Tesla’s market capitalization and achievement of targets.
Musk has transformed Tesla from a niche automaker with manufacturing problems into a world leader in electric vehicle manufacturing with American and Chinese factories. At the beginning of the year, Tesla’s capitalization for the first time exceeded the value of the two largest US automakers – Ford and General Motors combined. The value of Tesla shares rose amid the opening of a new plant in Shanghai and the launch of Tesla Model Y production there, as well as in connection with successful financial results for the last reporting quarter.
In January, Tesla’s market value for the first time reached $ 100 billion, a mark that, if kept for several months, the head of the company, Elon Musk, will receive a large reward. Recently, the company has exceeded the threshold required for Elon Musk to receive his first award.
Musk now owns about 18.5% of the company as of May 1, according to FactSet, with a stake estimated at $ 24 billion. In total, Musk can earn more than $ 50 billion to achieve Tesla’s market capitalization of $ 650 billion.
Tesla shareholder Richard Tornetta through the court requires the company to reduce the compensation package of Elon Musk and review the composition of the board of directors. The plaintiff accused the board of directors and Mask of unjust enrichment. In the lawsuit, Tornetta states that Mask’s compensation package exceeds similar payments to all other heads of public companies.
Tesla was forced to limit its electric car manufacturing activities during the coronavirus pandemic, much to Musk’s dismay. During a conference call following the results of the first quarter, Musk called the order to stay at home, designed to slow down the spread of the virus, “fascist.”
Since March, Tesla transferred many employees to work from home, sent other employees on unpaid leave and cut their salaries, stopping the work of contractors.
In early May, Elon Musk tweeted Tesla shares. He first wrote on Twitter that he was selling all of his property, including his own home. After that, he added that, in his opinion, Tesla shares are too expensive. As a result, the automaker’s stock fell almost 10%.
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