By
Bena Ilyas
April 23rd, 2024
Yesterday, Tesla hit a new milestone of $250 billion in its six-month average stock value. As a result, Musk is poised to secure his fourth payment tranche.
Tesla Inc (NASDAQ: TSLA) CEO Elon Musk is set to receive another $3 billion as the company is set to hit a new milestone in stock market value. Upon the release of the Tesla third-quarter report, Musk may secure his fourth tranche according to his milestone pay package deal from his 2018. Since his first tranche worth $700 million was received in May, its value has grown as Tesla stock also increased. With eight tranches to go, each tranche gives Musk the option to buy Tesla’s shares at $70 each. In total, the CEO could acquire about 8.44 million of the company’s shares, based on the current trading price.
Musk to Receive Another $3 Billion
On the 6th of October, Reuters reported that the electric vehicle maker six-month average stock value hit $250 billion. The new milestone points at another compensation for the CEO in line with his agreed pay package with Tesla’s shareholders. The Tesla pay package for Elon Musk is currently the highest among top US executives as he hits each milestone.
Notably, the pay package is based on Tesla’s market capitalization and operational goals. Now, Musk will enjoy a series of stock options once the EV company hits a set goal in revenue or profitability.
Reuters published a chart to show the six-month average of Tesla’s market cap. The report stated:
“Tesla’s six-month average capitalization must reach a series of target levels for each of Musk’s options tranches to vest. Musk must also hit operational targets, of which so far he has only met three and needs another before winning his fourth payout.”
Currently, TSLA is at a premarket trading price of $419.50. If Musk sells the last three tranches in addition to the approaching one, he would make a combined profit of $11.8 billion, at $3 billion per tranche. Tesla presently boasts of a $386.47 billion market value.
Tesla Hit New Milestone
Over the past year, Tesla has surged over 746%. Since the beginning of the year, the EV company has climbed nearly 395%. In addition to recent increases fueled by a rise in demand for Tesla’s Model 3 sedan, the company added more than 51% over the last three months. Similarly, TSLA upped 13.02% in the last one month. However, Tesla has lost nearly 4% in the last five days.
Ahead of Tesla’s quarterly financial report, the company has announced a record delivery of 139,300 vehicles.
As noted in the Reuters report, adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) will be the yardstick for Musk’s personal finances. Notably, Tesla has designed its adjusted EBITDA to exclude the cost of stock compensations, including Musk’s compensation.
Furthermore, the report revealed that Tesla’s adjusted EBITDA reached $4.42 billion in the four quarters through June. This is nearly the $4.5 billion milestone that would unlock the next options tranche for Musk.
Earlier, JPMorgan Chase (NYSE: JPM) estimated that Tesla’s adjusted EBITDA for the September quarter would be $1.183 billion. In accordance with JPMorgan’s estimation, it would increase Tesla’s four quarters of adjusted EBITDA to $4.52 billion.