Sat. Oct 31st, 2020

Elon Musk is now the fourth-richest person in the world. He’s about to get even richer

8 min read

New York (CNN Business)Elon Musk is worth $96 billion, making him the fourth-richest man in the world, according to Bloomberg. He’s about to get a lot richer.

The Tesla CEO takes no regular salary, but in 2018 shareholders approved a pay package that could eventually give him 20.3 million stock options, paid in 12 equal tranches, potentially making him the richest person in the world. Thanks to the tremendous run-up in Tesla shares, Musk has qualified for two blocks of options, which on paper are worth about $2.8 billion each after he pays the exercise price.Now he’s weeks away from qualifying for the third tranche of options, worth an additional $2.8 billion.

    Musk will be awarded the options as the company hits a series of targets both for financial results and market value. One of the two milestones that must be hit for those options to be exercised is that Tesla (TSLA) shares, which were valued at $372 billion at Monday’s close, must maintain a $200 billion average market value over the prior six months, a target it hit over the course of the last five months. So even if Tesla shares lose nearly half their current value over the next month, they’d still have a six-month average of $200 billion or greater.Read MoreThe other milestone is based upon Tesla’s revenue or profit performance. And if analysts’ forecasts are right, Tesla should be able to do that in the current quarter. The measure of profits used to judge success must be $4.5 billion over a 12-month period. The company nearly reached that over the 12 months ending in June, when it earned $4.4 billion. Its third-quarter forecast is for earnings of $1.4 billion, up about a third from what it earned on that basis a year ago.If he does get the options, Musk won’t actually own the shares. He has yet to exercise any of the options he received this year or most of what he was awarded in prior years (He did not not receive any options in 2018 or 2019.) Typically, options are exercised only when the investor holding them is ready to sell the shares, or if they are due to expire.No matter how many options Musk gets this year, they will be only a fraction of his current Tesla stockholdings.

    Photos: Billionaire entrepreneur Elon Musk

    Photos: Billionaire entrepreneur Elon MuskElon Musk, the CEO of SpaceX and Tesla Motors, poses for a photo in 2013.Hide Caption 1 of 35

    Photos: Billionaire entrepreneur Elon MuskMusk, left, is seen with his brother, Kimbal, in this childhood photo posted by their mother, Maye. Elon Musk was born June 28, 1971, in Pretoria, South Africa. His mother is a model and nutritionist. His father, Errol, is an engineer.Hide Caption 2 of 35

    Photos: Billionaire entrepreneur Elon MuskMusk is seen at left with his sister, Tosca, and Kimbal in 1976.Hide Caption 3 of 35

    Photos: Billionaire entrepreneur Elon Musk”When Elon was young, I noticed that he read everything,” Maye Musk wrote in her book “A Woman Makes a Plan: Advice for a Lifetime of Adventure, Beauty and Success.” When Elon was 12, he wrote code for a video game called “Blastar” and sold it to a computer magazine for $500.Hide Caption 4 of 35

    Photos: Billionaire entrepreneur Elon MuskMusk celebrates his 18th birthday in 1989. He would leave South Africa for Canada, where he studied at Queen’s University in Kingston, Ontario. In 1995, Musk graduated from the University of Pennsylvania with degrees in economics and physics.Hide Caption 5 of 35

    Photos: Billionaire entrepreneur Elon MuskMaye Musk celebrates her 50th birthday party with her children in 1998. With her, from left, are Tosca, Kimbal and Elon. In 1995, Elon Musk co-founded Zip2 Corp., a company that developed online city guides. He would sell it to Compaq in 1999 for $307 million.Hide Caption 6 of 35

    Photos: Billionaire entrepreneur Elon MuskPayPal CEO Peter Thiel, left, and Musk pose at the company’s corporate headquarters in Palo Alto, California, in 2000. Musk had co-founded X.com, an online banking and financial services company. It merged with Continuity in 2000 and was renamed PayPal. The online payment platform was acquired by eBay in a $1.5 billion deal in 2002. Musk pocketed $165 million.Hide Caption 7 of 35

    Photos: Billionaire entrepreneur Elon MuskMusk poses next to a SpaceX Dragon spacecraft in 2008. Musk founded SpaceX in 2002 with the intention of making space travel cheaper and more accessible. In 2010, the Dragon became the first commercial spacecraft to orbit the Earth and return. In 2012, it became the first private capsule to connect to the International Space Station.Hide Caption 8 of 35

    Photos: Billionaire entrepreneur Elon MuskMusk, bottom, watches a Falcon 1 rocket lift off in 2008. It was the first privately developed liquid-fuel rocket to reach orbit.Hide Caption 9 of 35

    Photos: Billionaire entrepreneur Elon MuskIn 2008, Musk became CEO and product architect of Tesla Motors. Years earlier, he had joined the electric-car company as chairman of the board, overseeing its initial round of investment funding.Hide Caption 10 of 35

    Photos: Billionaire entrepreneur Elon MuskMusk walks with US President Barack Obama at Florida’s Kennedy Space Center in 2010.Hide Caption 11 of 35

    Photos: Billionaire entrepreneur Elon MuskMusk is joined by his fiancee, actress Talulah Riley, and his twin sons, Griffin and Xavier, at a Nasdaq opening-bell ceremony in 2010. Musk has been married three times — twice to Riley. Their second divorce came in 2016.Hide Caption 12 of 35

    Photos: Billionaire entrepreneur Elon MuskMusk unveils the Falcon Heavy rocket, billed as the world’s most powerful rocket, in 2011. Musk told CNN he decided to build the rocket to put bigger satellites into orbit.Hide Caption 13 of 35

    Photos: Billionaire entrepreneur Elon MuskMusk attends the opening of a Tesla store in Newport Beach, California.Hide Caption 14 of 35

    Photos: Billionaire entrepreneur Elon MuskMusk walks in a procession after delivering the commencement speech at the California Institute of Technology in 2012.Hide Caption 15 of 35

    Photos: Billionaire entrepreneur Elon MuskMusk holds up a model rocket in this photo for Bloomberg Businessweek magazine in 2012.Hide Caption 16 of 35

    Photos: Billionaire entrepreneur Elon MuskMusk appears on the late-night talk show “Jimmy Kimmel Live” in 2013.Hide Caption 17 of 35

    Photos: Billionaire entrepreneur Elon MuskMusk poses with a Tesla during a visit to Amsterdam, Netherlands, in 2014.Hide Caption 18 of 35

    Photos: Billionaire entrepreneur Elon MuskMusk and his then-wife, Talulah Riley, attend the Vanity Fair Oscar Party in 2014.Hide Caption 19 of 35

    Photos: Billionaire entrepreneur Elon MuskMusk represents SpaceX at a US Senate subcommittee hearing in 2014. The hearing was to learn more about space launch programs. SpaceX had already landed a few federal contracts at that point, and Musk made his case for more.Hide Caption 20 of 35

    Photos: Billionaire entrepreneur Elon MuskMusk unveils the dual-engine chassis of the new Tesla Model D in 2014.Hide Caption 21 of 35

    Photos: Billionaire entrepreneur Elon MuskMusk attends the Time 100 Gala with filmmaker George Lucas, left, and rapper Kanye West in 2015.Hide Caption 22 of 35

    Photos: Billionaire entrepreneur Elon MuskMusk guest-stars on an episode of the TV sitcom “The Big Bang Theory” in 2015. He played himself.Hide Caption 23 of 35

    Photos: Billionaire entrepreneur Elon MuskMusk has long said he wants to make humans an “interplanetary species,” and in 2016 he laid out his plan to colonize Mars. He was speaking at the International Astronautical Congress, a meeting of multiple international space-exploration associations.Hide Caption 24 of 35

    Photos: Billionaire entrepreneur Elon MuskMusk and other business leaders listen to US President Donald Trump during a visit to the White House in 2017.Hide Caption 25 of 35

    Photos: Billionaire entrepreneur Elon MuskMusk speaks to reporters in 2018, a day before SpaceX launched the Falcon Heavy, the world’s most powerful rocket.Hide Caption 26 of 35

    Photos: Billionaire entrepreneur Elon MuskMusk and his girlfriend, singer Grimes, attend the Met Gala in New York in 2018.Hide Caption 27 of 35

    Photos: Billionaire entrepreneur Elon MuskMusk is seen on a television monitor on the floor of the New York Stock Exchange in 2018. Musk smoked a joint while talking to podcast host Joe Rogan about what it’s like inside his head (“a never-ending explosion”), keeping a car company in business (“very difficult”) and trying to get governments to regulate artificial intelligence (“nobody listened”).Hide Caption 28 of 35

    Photos: Billionaire entrepreneur Elon MuskIn 2018, Musk demonstrates his Boring Company’s first tunnel. It was built as an experiment in underground transportation, with the aim of providing alternative routes to traffic-jammed streets.Hide Caption 29 of 35

    Photos: Billionaire entrepreneur Elon MuskMusk leaves a federal court in New York in 2019. The Securities and Exchange Commission had asked the court to hold Musk in contempt for violating an agreement that requires he get pre-approval for social-media posts about Tesla. The judge asked Musk and the SEC to go back to the drawing board and better define exactly how and when Musk’s tweets need to be reviewed. The two parties were able to reach a settlement.Hide Caption 30 of 35

    Photos: Billionaire entrepreneur Elon MuskMusk reveals Tesla’s new electric pickup truck in 2019. A demonstration of the Cybertruck’s supposedly unbreakable windows backfired, however, when a metal ball thrown at the windows did, in fact, break them.Hide Caption 31 of 35

    Photos: Billionaire entrepreneur Elon MuskMusk leaves a federal court in Los Angeles in 2019. After a four-day trial, a jury took less than an hour to decide that Musk did not defame a British caver when he sent a tweet calling him a “pedo guy.” Defense lawyer Alex Spiro said Musk’s tweet “was a joking, deleted, apologized for, responsive tweet.”Hide Caption 32 of 35

    Photos: Billionaire entrepreneur Elon MuskMusk attends a Tesla ceremony in Shanghai, China, in January 2020. Tesla started delivering its Shanghai-made Model 3 cars to the public, the first step in Musk’s much bolder plan for the world’s biggest market.Hide Caption 33 of 35

    Photos: Billionaire entrepreneur Elon MuskMusk speaks at a January 2020 news conference after SpaceX’s new crew-worthy spacecraft, Crew Dragon, reached its last major milestone in a years-long testing program. NASA asked the private sector to develop crew-worthy spacecraft to replace the space shuttle program after it was retired in 2011. SpaceX was allotted $2.6 billion and Boeing was awarded $4.2 billion in 2014, and the space agency initially predicted their vehicles would be ready to fly astronauts by 2017. But development of both spacecrafts took years longer than expected.Hide Caption 34 of 35

    Photos: Billionaire entrepreneur Elon MuskMusk looks at his new baby boy in this tweet posted by his mother in May 2020. The baby, named X Æ A-12, is his first child with Grimes. He has five other children from a previous marriage.Hide Caption 35 of 35

    He owns 34 million shares of the stock, a stake equal to about 18% of the company, which is valued $68 billion.Musk qualified in May for the first tranche of options under his current pay package. At that time the options were worth about $770 million. He qualified for the second earlier this month when the company’s stock price lifted the value of that block of options to $2.1 billion.

      As the stock continues to rise, so does the potential value of the options, which is why the two earlier blocks of options are now worth a total of $5.6 billion, while the next block would be worth $2.8 billion, at current prices.Tesla is about to execute a five-for-one stock split. Although that split will change the total number of shares and options held and outstanding, it won’t change the value of Musk’s holdings.

      Source: edition.cnn.com

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