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Tesla rewards Elon Musk with $769m payday

Michael Cogley
Elon Musk earned the payday as part of an audacious compensation package approved by the board in 2018 - BRENDAN SMIALOWSKI /AFP

Tesla has rewarded its CEO Elon Musk with a  $769 million (£623m) payday as part of an unprecedented multi-billion-dollar performance package.

Musk has foregone a base salary in exchange for receiving discounted Tesla shares, and is eligible for the first batch based on company performance, according to a filing with the US Securities and Exchange Commission.

"In particular, 2019 was a record-setting year for Tesla's annual revenues, year-end cash balance, vehicle production and deliveries, and energy storage deployment," Tesla's board said in the filing.

Tesla shareholders will be asked to endorse the compensation at an annual meeting of investors in early July.

"One of the 12 tranches under this award has vested and become exercisable," the board said.

The first, which has now been triggered, was dependent on Tesla revenue exceeding $20bn (£16.5bn) in total revenue over the last four quarters and maintaining a valuation of more than $100bn.

The stock option is worth around $800m to Musk, who recently revealed that he was ridding himself of many of his worldly possessions.

Tesla’s share price was valued at around $301 in March 2018, when Musk agreed to the deal. Since then Tesla has enjoyed a meteoric rise in fortunes, more than doubling in value to $149bn with shares now valued at $805.

In a statement to the Securities Exchange Commission (SEC) in the US, Tesla said that the milestones laid out in Musk’s compensation plan were “viewed as difficult hurdles at the time of grant”.

The board said that at Musk’s request the company “eliminated” his base salary meaning that “100pc” of his future compensation was “at-risk” in the form of unvested stock options.

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Should Musk fill out the totality of his compensation plan he would be in line to collect around 20.3 million new Tesla shares at the reduced price, which could catapult him into a new echelon of wealth.

Musk’s enormous reward comes as his space exploration company SpaceX looks to launch a capsule to the International Space Station.