Tesla (WKN: A1CX3T) and Elon Musk continue to polarize. In any case, the US electric car pioneer has mutated into a steep course rocket in the past weeks and months. However, the visionary, but sometimes somewhat stubborn CEO Elon Musk demands a lot from his consumers and fans.
In any case, one thing is certain: The financial fate of Tesla and Elon Musk seems to be very closely intertwined. In any case, it could now be seen in the short to medium term how much Musk himself believes in Tesla and in the company’s short and medium-term prospects.
Why? Quite simply: It is payday for Elon Musk, which could well be worth it. However, it is also linked to other requirements, which, on the other hand, could have a bitter aftertaste. Let’s do a little bit of the calculation below.
Elon Musk’s flexible compensation
As fans and connoisseurs of the American electric car maker know, the compensation plan of Tesla boss Musk is as extraordinary as the visionary CEO himself. Musk can benefit from this by reaching certain target values for the stock market value. After the recent rally and constantly leaving the $ 100 billion mark, this is now the first potential payday for the CEO.
Accordingly, Elon Musk can now get hold of 1.7 million Tesla shares via an option, and with a powerful discount. The subscription price is only $ 350 and based on a current share price level of over $ 800, one thing is obvious: it might be worth using the option. Like the stock exchange portal The shareholder calculated, the book profit would be around 700 million euros. A potentially very steep remuneration.
However, Musk would also have to take $ 595 million into his own hands to buy the shares via the option. In addition, the Tesla visionary cannot directly sell this share package again and realize the book profit, but would have to hold the share package for at least five years. An interesting decision that Musk is faced with. Which could also show how the CEO is looking into the future now. Or how the visionary judges whether the stock will still be over $ 350 in five years. And wants to confirm this assumption with an investment of almost $ 600 million.
But even if not: Destiny remains linked
But even if the Tesla CEO missed this tempting offer, his fate would remain linked to the Tesla company. Finally, investors shouldn’t forget that Musk is still the largest single shareholder in the US company. Around 18.5% of all outstanding shares are owned by the eccentric. However, his skin in the game could now increase a little.
However, investors should nevertheless take one important thing out of this general situation: Musk will always choose the company and investor perspective when making his decisions at Tesla. Precisely because he is not just a managing director himself, but a key investor.
That may make you sleep better at night if the Tesla share shows its volatile side again. Of course, it would be great to see Musk raise his stake here again. That remains to be seen. However, there could be other options depending on how Tesla stock will develop in the next few years.
The post Tesla share: This shows how much Elon Musk himself believes in his company! appeared first on The Motley Fool Germany.
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Vincent does not own any of the stocks mentioned. The Motley Fool owns shares of and recommends Tesla shares.
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