Tesla Analyst Sees 'Monster' Pay Package For Elon Musk — That May Be A Good Thing

A majority of Elon Musk's wealth is from the shares he holds in his flagship electric vehicle manufacturing venture Tesla, Inc. TSLA, given he has not been receiving a paycheck from the company.

What Happened: Musk’s compensation plan ratified by Tesla shareholders in 2018 consists of 304 million stock option awards, as adjusted to the splits announced in 2020 and 2022, the company’s most recent 10-K filing showed.

It consists of 12 vesting tranches, with the schedule of payment depending on the achievement of operational milestones and market conditions. The exercise price of the stock options is $23.34 per share.

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This apart, Musk owns 412 million shares outright, and these shares along with options, adjusted for the exercise price, would work out to $142 billion, based on the closing price of $208.31 on Friday, CNN reported.

The report explored the possibility of the board announcing a new pay package for Musk. The billionaire received the last remaining tranche of options granted under the 2018 compensation plan, CNN said, citing a filing by the company in January.

The new pay plan could be disclosed at Tesla’s Investor Day on March 1 or in its proxy statement filed ahead of its annual shareholder meeting, the report said.

See also: How Did Elon Musk Make His Money

Musk Could Get Fat Pay Check: Tesla bull and Wedbush analyst Daniel Ives said he expects an “absolute monster package for Musk,” CNN said. “I think Musk is the lifeblood of Tesla. He’s a key part of the premium in the stock,” he added.

A new pay package could calm investor nerves regarding Musk remaining committed to Tesla for long, and not shifting his allegiance to Twitter or SpaceX or Neuralink or the Boring Company, he said.

“The board needs to send a signal; the street needs to have comfort that Musk is going to be dialed in as CEO of Tesla for the better part of the next decade,” the analyst reportedly said.

Some Tesla investors are already comfortable with the hefty option award Musk received under the 2018 plan and have filed a case with a Delaware court regarding the legitimacy of the award.

Tesla closed Friday’s session at $208.31, up 3.10%, according to Benzinga Pro data.

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