Tesla Inc Chief Executive Officer Elon Musk has qualified for an unprecedented $2.1 billion paycheck, his second jackpot from the electric vehicle manufacturer after the group's huge stock rally since May.
In afternoon sessions, Tesla's stock fell 3 percent, depleting a recent advance that boosted the company's market value to nearly $300 billion – bigger than any of its car competitors, Reuters reported.
Despite the stock hiccup late Tuesday, and critically for Musk's personal finances, the group's six-month average market valuation for the first time has hit the $150 billion mark, the report added. This means Musk is now eligible to exercise an extra 1.69 million stock option, although he must wait at least five years before he can unload the stocks.
The additional options have a strike price of $350.02, which means Musk would amass $2.1 billion in earnings if he immediately exercised the options.
Musk used up the first serving of the payout in May when the company's average six-month market cap reached past $100 billion. To meet the next milestone, the company's market cap had to rise another $50 billion in value and $35 billion in sales or $3 billion in adjusted EBITDA.
To be eligible for the third tranche, Tesla's market value must hit a six-month average of $200 billion and either $55 billion in sales or $4.5 billion in adjusted EBITDA.
Tesla's share price has grown over 200 percent since then, and the electric car maker is now valued at more than Toyota Motor, Volkswagen and Hyundai combined.
Musk's first tranche was valued at around $700 million in May when it vested, but its actual market value has since dropped along with the company's stock price. In 2019, the median payout for Tesla workers was roughly $58,000, based on a company filing. Tesla's stock has advanced over 500 percent over the past year as the group hiked sales of its Model 3 sedan.
Some stakeholders believe the company might post a profit during its second-quarter report on Wednesday, after higher-than-estimated vehicle orders in the second quarter. It would mark four straight profitable quarters, a first for the group, and a major hurdle for it to be included in the S&P 500 index.
According to FactSet, Tesla is the 12th-biggest U.S. company, ahead of groups like JPMorgan, UnitedHealth and Home Depot. The 49-year old Musk is the ninth-wealthiest man in the world, with a $71.5 billion fortune, the Bloomberg Billionaires Index revealed.
