Tesla, Which Is Now Worth 1 Trillion Dollars, Makes Elon Have Double Profits

Tesla's stock continues to skyrocket, making Elon Musk even richer. (photo: doc. unsplash)

JAKARTA - The surge in the market value of Tesla Inc's stock that surpassed $1 trillion on Monday, October 25, was a double benefit for Chief Executive Elon Musk as the biggest shareholder of the electric car maker.

The stock rallied 12.7% on news that Tesla got its biggest order from car rental company Hertz. With Tesla's stock hitting a record closing high of $1,024.86 per share, Musk's 23% stake in the trillion-dollar company is now worth about $230 billion, according to Refinitiv.

The shares include more than $50 billion worth of options that have been granted under Musk's 2018 compensation package. In addition, Musk is a major shareholder and CEO of rocket maker SpaceX, a private company worth $100 billion in the October secondary stock sale, according to a CNBC report.

Musk does not receive a salary at Tesla. But its payment plan provides 12 options that are given away when Tesla's market cap and financial growth hit a series of increasing milestones. The options allow Musk to buy Tesla shares for $70 each, which is a discount of more than 90% off the current stock price.

Last week, Tesla reported adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $3.2 billion, up 77% from a year earlier. That was enough to grant his seventh option, worth more than $8 billion as of Monday, October 25.

Tesla's six-month average stock market valuation is more than $650 billion, paving the way for all 12 options in Musk's payout package, if the company hits its progressively higher earnings targets and adjusts EBITDA for the remaining five tranches.