Tesla’s Market Cap Closes Over $100 Billion For First Time

Electric vehicle maker Tesla saw its shares rise over 8% in intra-day trading on Wednesday, pushing the stock’s market cap to over $107 billion.

Though the stock gave back some of those gains, it still closed up 4% with a market cap of $102.7 billion.

Tesla’s CEO Elon Musk may have been ecstatic over Wednesday’s move as this could mean a big payout for the company’s leader.

It was in 2018 that Tesla’s board and shareholders authorized a compensation plan for Musk, allowing him to earn options worth potentially more than $55 billion over the next decade.

Musk would earn the first tranche of at least $346 million in options if Tesla’s market capitalization hits and stays at $100 billion.

To get this big payout Musk will have to keep the company’s market cap above $100 billion long enough to sustain that level on both a 30-day and six-month trailing average, according to a regulatory filing.

Tesla must also hit annual revenue or EBITDA milestones at the same time in order for Musk to get that first tranche.

The company would need to report either trailing four-quarter revenue of $20 billion or EBITDA (minus stock-based compensation) of $1.5 billion.

Musk owns around 20% of the company and has no salary.

There is a lawsuit by Tesla stockholder Richard Tornetta who has sued Musk and members of Tesla’s board of directors in a Delaware Chancery Court, alleging that the award is excessive. He also alleges that the board’s vote to give it to him amounts to a breach of fiduciary duty.
Tesla shares are up over 30% so far this year.

The company is expected to report fourth-quarter earnings after the market closes on Jan. 29th.

Disclaimer: We have no position in Tesla Inc. (NASDAQ: TSLA) and have not been compensated for this article.