Yahoo Finance Elon Musk poised to collect $23bn bonus as Tesla beats targets
Electric car giant’s CEO says he is not in talks on new bonus scheme after completing 2018 deal early
Elon Musk, chief executive of Tesla and the world’s richest person, is set to collect a $23bn (£17.6bn) bonus after the Californian electric car company’s first-quarter results exceeded performance targets.
Musk, who is already sitting on an estimated $249bn fortune, is in line for the bonus share payout after Tesla hit share price and financial growth milestones in its earnings on Wednesday night.
Tesla made an adjusted profit of $5bn on revenue of $18.8bn in the first quarter of the year – an 81% increase on the same period a year earlier. The results, combined with the growth in Tesla’s share price performance, mean Musk has hit targets that should lead to a bonus share payout worth about $23bn.
The company outlined an extraordinary deal for Musk in 2018 that would pay him an unprecedented $55.8bn (£40bn) bonus if he built the business into a $650bn company within a decade.
He achieved that milestone early, in January 2020. Tesla today has a market value of $1.1tn, following a 1,300% rise in its share price since the target was set in January 2018.
It means Musk, who collects no salary, should now have unlocked the final three parts of the 12-tranche bonus scheme. Each tranche gives Musk the right to buy 8.4m Tesla shares at $70, a huge discount on the current $977 share price. His profit on each tranche could be $7.7bn or a combined value of $23bn. The payments need to be signed off by the board, and he must hold on to the shares for five years before selling.
Musk, who is attempting to buy Twitter for more than $43bn, said he was not in talks with Tesla’s board over a new bonus scheme after completing the 2018 deal early. “There are no discussions underway about incremental compensation for me,” he said on the company’s earning call.
“The future is very exciting,” Musk said in the call with investors. “I’ve never been more optimistic or excited about the future of Tesla than I am right now.”
