What would you do with a $700 million windfall?
That's what Tesla (TSLA) - Get Report founder and CEO Elon Musk will have to decide after the electric carmaker’s share price jumped more than 8% on Monday, putting its market capitalization at $141.1 billion at the close - and putting Musk in position to cash in on $700 million in stock options.
Tesla’s stock market value reached a six-month average of $100.2 billion, according to an analysis of Refinitiv data, which triggers the vesting of the first of 12 tranches of options of Tesla stock that Musk can buy as part of a pay package agreed to in 2018.
Musk has already met two other requirements by hitting a growth target and far exceeding a one-month average $100 billion market cap, according to Reuters.
Each tranche gives Musk the option to buy 1.69 million Tesla shares at $350.02 each. At Tesla’s closing stock price of $761.19, Musk would theoretically be able to sell the shares for a profit of $694 million.
Musk, who is also the majority owner and CEO of the SpaceX rocket maker, receives no salary or cash bonus - only options that vest based on Tesla’s market cap and set milestones for both revenue and profit growth.
Musk shocked investors on Twitter on Friday, telling followers that he felt Tesla’s stock price was “too high,” sending the share price down 10%. Tesla posted its third quarterly profit in a row last week, even as its business remains heavily impacted by the coronavirus pandemic.
While he did not quantify his reasoning on why he felt the price was too high, investors found it odd that he would publicly comment just ahead of the $100-billion market-cap milestone - and just ahead of qualifying for his $700 million.
Shares of Tesla were up 2.33% at $778.93 in trading on Tuesday.