After almost a decade of its entry in the stock market, electric car manufacturer Tesla's stock valuation crosses the valuation of Ford Motor Company and General Motors combined. On Wednesday, the company's stock rose 4.1 per cent and closed at $569.56 taking Tesla's valuation above $100 billion. "Fueled by a surprise third-quarter profit, progress at a new factory in China and better-than-expected car deliveries in the fourth quarter, Tesla's stock has more than doubled in the past three months," Reuters reported. Now this calls for a huge paycheck of over $346 million for the company's CEO Elon Musk.
According to a deal made by the company board, Elon Musk "would receive no guaranteed compensation of kind- no salary, no cash bonuses and no equity that vests simply bypassing of time without the rise in value. However, the value of the stock increased. Under the same compensation deal by Tesla's board, Elon Musk had to be paid in stock awards which are stocks worth around one per cent of the company's valuation for "every 12 milestones over a period of 10 years." As the company has achieved the valuation of $100 billion, Musk will get shares worth of $346 million. Goldman Sachs had earlier estimated that Tesla would need $10 billion by 2020 to sustain.
Meanwhile, in the third quarter, Tesla posted a $143 million profit, raising hopes that the company, which also makes battery storage units, could finally turn to the profitability corner. It also lost $1.1 billion during the first half of last year. The company will report its result for the fourth quarter on January 29. Earlier this year, the company also delivered a record of about 112,000 vehicles in the last quarter and around 367,500 units in 2019. Also, on Wednesday, the state of Michigan confirmed that Tesla had reached a lawsuit settlement allowing it to sell and service vehicles in the state.
(With inputs from agencies)