While Tesla’s shares have taken a hit in recent weeks just like most others, 2022 could still prove to be a very fruitful year for Elon Musk.
In 2018, Musk famously agreed to a pay package that sees him take no base salary or cash bonus, and instead, he receives stock options when the carmaker hits certain financial and market value targets. Through this pay package, he could ultimately walk away with 101 million split-adjusted shares awarded over 12 tranches.
As the automaker’s value has soared over the past two years, Musk has hit all of his market value benchmarks, as well as seven of the financial targets. He has already received 59 million of the 101 million options and CNN reports that he could hit the remaining five financial targets this year, qualifying him for four tranches of the package, as well as one in 2023.
Each tranche gives Musk the right to purchase 8.4 million shares of stock for $70.01 a share. At current market rates, that would mean each tranche is worth $7.3 billion. The remaining five tranches total $36.3 billion. Musk currently owns 177.7 million shares of Tesla, plus the options he holds to buy the aforementioned 59 million additional shares.
Musk won’t have to worry about a big tax bill on these options for quite some time either. The remaining 42 million options won’t expire until January 2028 and he may not exercise them until 2027.
Evidently, Musk seems set to sit atop the list of the world’s richest people for quite some time.