Tesla chief Elon Musk set for £600m payday after targets reached

Tesla chief executive Elon Musk looks set to receive a £600 million boost to his wealth after his company hit its targets.

The electric car maker ended with an average market value of 100.4 billion dollars (£81 billion) for the past six months on Wednesday, according to data drawn from FactSet Research.

That was the final hurdle that Tesla needed to clear for Mr Musk to receive nearly 1.69 million stock options priced at 350.02 dollars (£285).

Tesla’s stock closed at 782.58 dollars (£635) on Wednesday, translating into a pre-tax gain of about 730 million dollars if Mr Musk were able to exercise them immediately.

But Mr Musk cannot sell the newly awarded stock for at least five years after he receives the options, according to the company’s most recent quarterly report.

That filing made last week disclosed Tesla expected Mr Musk to qualify for the stock award at some point before July.

He can afford to wait before cashing in on his latest windfall, given his wealth is currently estimated at 39 billion dollars (£31 billion) by Forbes magazine.

Tesla declined to comment about Mr Musk’s pay package beyond its disclosures in regulatory filings.

The Palo Alto, California, company had already hit the revenue and adjusted earnings benchmarks that Mr Musk needed to receive the first portion of one of the biggest pay packages in US history.

All told, the incentives approved by Tesla’s board in 2018 consist of 20.3 million stock options that will be doled in 12 different bundles if the company is able to reach progressively more difficult financial goals.

The company’s market value currently stands at 145 billion dollars (£117 billion), driven by an 87% run-up in its stock so far this year.

The surge reflects a growing belief that that Mr Musk will deliver on his promise to transform Tesla from a niche maker of luxury cars running on electricity to a mass market automaker.

Mr Musk, though, rattled Wall Street late last week when he tweeted that he believed Tesla’s stock had soared too high.

The shares plunged by more than 10% after he made that startling assessment, but have bounced back during the past three trading sessions.

It was not the first time that Mr Musk has affected Tesla’s stock with his tweets.

In 2018, he tweeted that he had lined up financing to pursue a buyout bid for Tesla, causing the company’s then-slumping shares to rally.

Regulators alleged Mr Musk was misleading investors, resulting in a 40 million dollar (£32 million) settlement that also was supposed to ban him from using his Twitter account to post statements that could affect Tesla’s stock unless he got the approval of a company lawyer.

More recently, Mr Musk has created waves by railing against stay-at-home restrictions that have forced most businesses to close as part of the effort to slow the spread of coronavirus.

The clampdown has forced Tesla to close a San Francisco Bay Area factory that produces most of its cars.