It is now weeks away from qualifying for the third option tranche, worth an additional $ 2.8 billion.
Musk will receive the options as the company achieves a series of goals in both financial performance and market value. One of the two milestones that must be taken for these options to be exercised is that Tesla ( The shares, valued at $ 372 billion at Monday’s close, are expected to maintain an average market value of $ 200 billion over the previous six months, a target it has achieved in the past five months. )
So even if Tesla shares lost almost half of their current value over the next month, they would still have a six-month average of $ 200 billion or more.
If he gets the options, Musk won’t actually own the shares. He has not yet exercised any of the options he received this year or most of what he was granted in previous years (he did not receive any options in 2018 or 2019.) As a general rule, options do not are exercised only when the investor who holds them is ready. sell the shares or if they are due to expire.
No matter how many options Musk gets this year, they will only be a fraction of his current Tesla inventory.
He owns 34 million shares of the stock, a stake equal to about 18% of the company, valued at $ 68 billion.
Musk qualified in May for the first tranche of options under his current compensation package. At that time, the options were worth around $ 770 million. It qualified for the second earlier this month when the company’s stock price increased the value of that option block to $ 2.1 billion.
As the stock continues to rise, so does the potential value of options, which is why the first two blocks of options are now worth $ 5.6 billion in total, while the next block would be worth 2.8 billion dollars, at current prices.
Tesla is on the verge of a five-for-one stock split. While this split changes the total number of shares and options held and outstanding, it will not change the value of Musk’s holdings.