If Tesla announces in tomorrow’s earnings call what everyone is expecting them to, CEO Elon Musk could be starting 2021 with another massive payday.
Unlike most CEO’s Musk doesn’t take a salary from Tesla. Instead his pay package entitles him to buy Tesla (TSLA) shares at a big discount if the company meets certain financial targets.
That resulted in Musk earning four separate tranches in 2020, allowing him to buy nearly 34 million TSLA shares at just $70 each.
Musk could earn another 8.4 million shares tomorrow. During tomorrow’s earning call, Tesla is expected to report adjusted earnings before interest, taxes, depreciation, and amortization of $2.3 billion, up 92% from the year previous.
If they do, Musk would earn his fifth tranche and the first of 2021. At current trading prices, that would net Musk nearly $7 billion (via Reuters).
It is worth noting it is only a payday on paper. Musk has said several times he has no plans to sell his shares, and will use his immense wealth to help make humans an interplanetary species.