Tesla CEO Elon Musk unveils the Cybertruck at the TeslaDesign Studio in Hawthorne, Calif. The cracked window glass occurred during a demonstration on the strength of the glass.
Robert Hanashiro | USA TODAY | Reuters
Tesla stock is set to reach a key milestone as it hovers above a market cap of $100 billion ahead of Wednesday’s first trade.
Tesla’s stock rose about 5% in after hours trading to follow up a stellar day Tuesday that saw the stock climb more than 7%. If the gains hold, it will bring the company’s value to more than $103 billion at the start of trading.
The gains could send CEO Elon Musk home with a tidy payout. In 2018, 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 shares if Tesla’s market capitalization hits and stays at $100 billion.
To earn the payout, the company must keep its market cap above $100 billion long enough to achieve a $100 billion market cap on both a 30-day and six-month trailing average, according to a regulatory filing. The company 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.
That’s all assuming the compensation plan holds up in court.
Tesla stockholder Richard Tornetta sued Musk and members of Tesla’s board of directors in a Delaware Chancery Court, alleging that the award is excessive, and the board’s vote to give it to him amounts to a breach of fiduciary duty.
— CNBC’s Lora Kolodny contributed to this report.