Thanks, Elon: Tesla Board Gives CEO $4.3M for Model X
The Tesla (NASDAQ:TSLA) Model X is one of 2014′s most anticipated automobiles, and it has already made CEO Elon Musk considerably wealthier. According to Bloomberg, the board of the Palo Alto-based company awarded Musk $4.3 million in stock for his work on the Model X SUV, an amount the company excluded from its earnings calculations. Tesla’s billionaire chief executive has seen his fortune more than triple in 2013, a feat surpassed by company stock.
Tesla had another success story when the electric-vehicle maker announced its earnings for the second quarter on Wednesday, and the figures beat analysts’ expectations, triggering another jump in its stock price. By the close of the week, Tesla had risen nearly 11 percent, capping another chapter in the incomprehensible 352 percent surge of 2013.
In fact, Bloomberg estimates Elon Musk’s fortunes were boosted $570 million when Tesla’s stock again rose after the earnings report made investors bullish on Tesla for yet another trading session. The company’s earnings report had several different interpretations in terms of calculating the profit of the automaker.
Musk’s stock compensation wasn’t a part of the figures, and instead became one of the adjustments that the company claimed, totaling $16 million in all, according to Bloomberg. An investor might be tempted to raise an eyebrow at compensation paid for a vehicle that has yet to be manufactured, other than the production model. Musk addressed that issue in the conference call with analysts on Wednesday.
“We are hard at work on the Model X refining the design,” Musk said. “We expect to be in [limited] to deliver a small number of units at the end of next year and then volume production would recur in 2015.” The SUV, the first of its kind from Tesla, was originally expected to be out in late 2013 or early 2014. Tesla seemed to leave the door open for a 2015 release.
The company’s SEC filing that noted Musk’s $4.3 million in stock compensation wouldn’t vest until further goals were met for the Model X, but the company considered them to be on target. Musk and other company officials actually noted that a large part of the company’s focus was still on Model S production for overseas markets.
“We are still more on Model S than anything else…” Musk told analysts, “…[because] bear in mind, we have got right hand drive that’s coming out in the spring. Then there is the China version and actually there’s the European version that’s tying in a note there.” He also mentioned the right-hand drive version for Japan that would be settled before the focus went squarely on the Model X.
In terms of earnings, Musk noted in the call that it would be a concern more for 2015 rather than next year. Tesla obviously considers the goals on which the stock compensation was based quite reachable. Musk, already one of the 200-richest people on the planet, will likely be even wealthier by the time the Model X launches.
Don’t Miss: Toyota Fatality Trial: Day 1.