Tesla CEO Elon Musk. Photo credit: NASA/Bill Ingalls, under Creative Commons license

Tesla chief executive Elon Musk is in line for a potential $1.8 billion payday from options on the electric car maker, as its stock surges through the roof. Under a compensation agreement reached in 2018, Elon Musk is set for 12 tranches of options if Tesla meets certain market capitalization targets. The first of such tranche, which was was contingent on Tesla averaging a market cap of $100 billion over six months, was secured by Musk in May of this year. It amounted to a payday of over $700 million. Now, Musk seems to be in line for a second tranche, which is contingent on Tesla averaging a $150 billion market-cap over six months.

If fulfilled, Musk will get the option to purchase 1.69 million Tesla shares at $350.02 each, shares which currently trade at nearly $1,400 (as of writing) on the stock market. Theoretically, if Musk exercises those options and offloads the shares at the current price, he’ll clinch a profit of around $1.8 billion.

Even the first tranche of about $700 million that Musk secured in May would be currently worth about $1.7 billion thanks to Tesla’s surging stock. Over the past year, Tesla has surged 500% thanks to increased sales and more optimism from investors, even recently surpassing Toyota to become the world’s most valuable automaker. Quite not unexpectedly, Musk recently taunted Tesla stock shorts
by selling short shorts that sold out in minutes.

If the 12 tranches of Musk’s Tesla compensation plan are fulfilled, he could reap a nearly $60 billion payday. Musk currently takes no cash salary for Tesla, his compensation only coming from options.