Tesla CEO Musk earns incentive payout worth $775 million in first tranche

The compensation plan, approved by shareholders in 2018, consists of 20.3 million stock option awards broken up into 12 tranches of 1.69 million shares

Tesla on Thursday confirmed that CEO Elon Musk earned the first tranche worth more than $775 million (Rs 5,800 crore) of his incentive payout, in a document filed with the Securities and Exchange Commission.

The tranche is comprised of about 1.7 million shares of the company on Thursday's closing market value. Shares of Tesla closed at around $805.81 (Rs 61,000). Musk can buy these stock options at a price of nearly $350.02 (Rs 26,000) per share.

The SEC document reads, "As of the date of this proxy statement, one of the 12 tranches under this award has vested and become exercisable, subject to Mr Musk's payment of the exercise price of $350.02 per share and the minimum five-year holding period generally applicable to any shares he acquires upon exercise."

The compensation plan, approved by shareholders in 2018, consists of 20.3 million stock option awards broken up into 12 tranches of 1.69 million shares. These options would be offered in 12 increments if Tesla hits specific milestones on revenue and market capital.

CEO Musk was expected to earn around $56 billion (Rs 4,23,000 crore) even if no new shares were issued when the shareholders and board approved the package. However, last year Tesla sold around $2.7 billion (Rs 20,400 crore) in shares and convertible bonds.

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