The meteoric rise of Tesla Inc shares that recently pushed the company’s value over US$100 billion could turn into a supercharged payday for CEO Elon Musk.
Stock in Tesla rose another 4.1 percent on Wednesday, pushing the market value of the electric vehicle and solar panel maker past a critical milestone in Musk’s pay package. He could get a stock options package worth over US$371 million.
Tesla shares closed at US$569.56 on Wednesday, giving the company a market capitalization of US$102.7 billion.
Photo: AP
Shares have tripled in value since May, meaning Tesla’s market capitalization now exceeds the value of Ford Motor Corp and General Motors Co, combined.
For Musk, hitting US$100 billion in market value triggers an option to buy 1.69 million shares of Tesla stock for US$350.02 per share. If he sells the shares, he would make just over US$371 million.
However, for the options to vest, the market capitalization has to average above US$100 billion for the next six months, and it has to be above US$100 billion for the next 30 business days, according to the compensation packages detailed in company filings with the US Securities and Exchange Commission.
Musk could get more stock payouts for every additional US$50 billion increase in market capitalization. By meeting ambitious market capitalization and operational milestones, he could earn more than US$50 billion over the next decade if that value hits US$650 billion.
In the third quarter, Tesla posted a surprising US$143 million profit, raising hopes that the company, which also makes battery storage units, could finally be turning the corner to profitability.
However, Tesla has posted mostly losses during its first decade as a publicly held company, and it lost US$1.1 billion during the first half of last year. The company reports fourth-quarter results on Wednesday.
Earlier this year the company said it delivered a record of about 112,000 vehicles in the fourth quarter and about 367,500 for the full year last year.
Tesla, based in Palo Alto, California, had earlier projected deliveries of between 360,000 and 400,000 units worldwide.
Analyst Dan Ives of Wedbush Securities offered an upbeat view of Tesla in a research note on Wednesday.
“In our opinion, the company has the most impressive product roadmap out of any technology/auto vendor around (which the market cap reflects vs. its traditional auto competitors) and will be a ‘game changing’ driving force for the EV (electric vehicle) transformation over the next decade with Model 3 front and center,” Ives said.
US President Donald Trump offered praise for Musk in a CNBC television interview aired on Wednesday.
“You have to give him credit,” Trump said.
“He’s one of our great geniuses, and we have to protect our genius. You know, we have to protect Thomas Edison and we have to protect all of these people that — came up with originally the light bulb and — the wheel and all of these things. And he’s one of our very smart people.”
Additional reporting by AFP
Taiwan’s foreign exchange reserves hit a record high at the end of last month, surpassing the US$600 billion mark for the first time, the central bank said yesterday. Last month, the country’s foreign exchange reserves rose US$5.51 billion from a month earlier to reach US$602.94 billion due to an increase in returns from the central bank’s portfolio management, the movement of other foreign currencies in the portfolio against the US dollar and the bank’s efforts to smooth the volatility of the New Taiwan dollar. Department of Foreign Exchange Director-General Eugene Tsai (蔡炯民)said a rate cut cycle launched by the US Federal Reserve
Handset camera lens maker Largan Precision Co (大立光) on Sunday reported a 6.71 percent year-on-year decline in revenue for the third quarter, despite revenue last month hitting the highest level in 11 months. Third-quarter revenue was NT$17.68 billion (US$581.2 million), compared with NT$18.95 billion a year earlier, the company said in a statement. The figure was in line with Yuanta Securities Investment Consulting Co’s (元大投顧) forecast of NT$17.9 billion, but missed the market consensus estimate of NT$18.97 billion. The third-quarter revenue was a 51.44 percent increase from NT$11.67 billion in the second quarter, as the quarter is usually the peak
The US government on Wednesday sanctioned more than two dozen companies in China, Turkey and the United Arab Emirates, including offshoots of a US chip firm, accusing the businesses of providing illicit support to Iran’s military or proxies. The US Department of Commerce included two subsidiaries of US-based chip distributor Arrow Electronics Inc (艾睿電子) on its so-called entity list published on the federal register for facilitating purchases by Iran’s proxies of US tech. Arrow spokesman John Hourigan said that the subsidiaries have been operating in full compliance with US export control regulations and his company is discussing with the US Bureau of
Pegatron Corp (和碩), a key assembler of Apple Inc’s iPhones, on Thursday reported a 12.3 percent year-on-year decline in revenue for last quarter to NT$257.86 billion (US$8.44 billion), but it expects revenue to improve in the second half on traditional holiday demand. The fourth quarter is usually the peak season for its communications products, a company official said on condition of anonymity. As Apple released its new iPhone 17 series early last month, sales in the communications segment rose sequentially last month, the official said. Shipments to Apple have been stable and in line with earlier expectations, they said. Pegatron shipped 2.4 million notebook
RSS