TSLA: Tesla Stock Pops 3% After Elon Musk Gets Board to Approve $56B Pay Package

Eccentric boss might get an unprecedented amount of money after several rejections and fierce debates over whether the pay was justified.

• Tesla stock TSLA finished Thursday’s session higher by 3%, after pumping more than 9% to its daily peak. Behind the rise was Elon Musk’s lofty pay package making history. A gargantuan pay package, negotiated in 2018, for the massive $56 billion, received approval from Tesla shareholders and is now one step closer to Musk’s bank accounts.
• The solid win comes after a court in Delaware, where Tesla is registered, refused to approve this “unfathomable” amount of money to be handed to a single individual. That’s why Musk is now moving the company’s headquarters to Texas. Meanwhile, the hefty sum is not a done deal just yet. The shareholder nod doesn’t override the court’s ruling. Now, the pay package is getting sent back for another vote with new disclosures.
• So what’s inside? It’s stock options. Some 303 million of them. Each option has a strike price of $23 a share, adjusted for stock splits, and the total package amounts to roughly 12% of Tesla stock outstanding. According to the 2018 agreement, Musk was entitled to his grand pay if he managed to reach a market cap of $650 billion, which he did in 2020. That market value translates to about $200 a share, meaning Musk’s options are worth about $180 a piece — the difference between the stock price and the option strike price. And $180 multiplied by 303 million options equals $56 billion.