Tesla’s board certified a financial milestone that unlocks the first tranche worth more than $700 million of an unprecedented multi-billion-dollar pay package for CEO Elon Musk, according a document filed Thursday with the Securities and Exchange Commission.
“As of the date of this proxy statement, one of the 12 tranches under this award has vested and become exercisable, subject to Mr. Musk’s payment of the exercise price of $350.02 per share and the minimum five-year holding period generally applicable to any shares he acquires upon exercise,” the SEC document reads.
The milestone allows Musk to purchase the first grouping or tranche of nearly 1.69 million shares at a steep discount. Tesla shares closed Thursday at $805.81, putting the value at $775 million. Musk is able to buy those stock options at a price of $350.02 per share. The compensation plan approved by shareholders in 2018 consists of 20.3 million stock option awards broken up into 12 tranches of 1.69 million shares. These options will vest in 12 increments if Tesla hits specific milestones on market cap, revenue and adjusted earnings (excluding certain one-time charges such as stock compensation).