Tesla board certifies first step of Musk's 55-billion-dollar package

Tesla and SpaceX Chief Executive Officer Elon Musk speaks during a round table discussion with President Donald Trump at Kennedy Space Center, Wednesday, May 27, 2020, in Cape Canaveral, Fla. (AP Photo)

Tesla chief executive Elon Musk has unlocked the first portion of his 55-billion-dollar compensation package, the company announced Thursday.

The billionaire entrepreneur, who does not receive a salary from Tesla, had opted for a 12-tranche pay plan in 2018, based upon the company reaching certain milestones.

The first of two conditions to reach the first tranche was met earlier in May when Tesla's average value on the stock exchange totalled more than 100 billion dollars for six months.

Tesla's board acknowledged the achievement in a regulatory filing on Thursday and certified the completion of the second requirement - for Tesla to achieve 20 billion dollars in revenue.

The satisfied condition allows the 48-year-old to buy more than 1.6 million shares at 350.02 dollars apiece. The company's share price closed at 805.81 dollars on Thursday.

If sold at current value, those shares could reap a windfall worth more than 775 million dollars if he were to sell the shares based on current value.

However, Musk must hold on to the shares for at least five years.

The achievement is a small step in an ambitious plan which aims to increase Tesla's market value to 650 billion by the end of the decade.

It is unclear whether Musk exercised his option to buy the shares yet.

Despite being worth close to 40 billion dollars according to Bloomberg's billionaire index, most of Musk's wealth is tied up in stock, Business Insider reported.

Tesla's board said that "100 per cent of Mr Musk's future compensation is at-risk" because of his unvested stocks.

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