@elonmusk will be footing the bill, Charley, as he has since the beginning.
If Elon succeeds in growing $TSLA by >10x for all shareholders as of the date he agreed to this compensation package, he will earn the right to pay Tesla $7.1B cash to purchase these stock options.
/1
If Elon succeeds in growing $TSLA by >10x for all shareholders as of the date he agreed to this compensation package, he will earn the right to pay Tesla $7.1B cash to purchase these stock options.
/1
https://twitter.com/CGrantWSJ/status/1304084217412845569
Under GAAP guidelines (using Black-Scholes), Tesla will expense a maximum of $2.283 billion against the income statement over the 10 years covered by the agreement which began March 21, 2018.
$0.7B has already hit as Elon made progress towards achieving the plan’s milestones.
/2
$0.7B has already hit as Elon made progress towards achieving the plan’s milestones.
/2
If it costs shareholders anything, it’s a maximum of:
12% dilution of a company whose market cap he will have grown enormously
+$2.283 billion over 10 years in imaginary SBC GAAP expense on the P&L
... paired with $7.1B in real cash Elon will pay Tesla for his shares.
/3
12% dilution of a company whose market cap he will have grown enormously
+$2.283 billion over 10 years in imaginary SBC GAAP expense on the P&L
... paired with $7.1B in real cash Elon will pay Tesla for his shares.
/3
Tesla has been free cash flow positive and non-GAAP profitable for over 2 years.
Tesla has been GAAP profitable over the past year and will moving forward even after paying for Elon’s stock compensation because they are growing global sales volume and improving margins.
/4
Tesla has been GAAP profitable over the past year and will moving forward even after paying for Elon’s stock compensation because they are growing global sales volume and improving margins.
/4
If you would like to know what I expect, here is my latest long-term tesla earnings forecast:
https://twitter.com/ICannot_Enough/status/1292565823740092417
... and if you would like further information on how the 2018 CEO Performance Award works, see this thread:
/6
/6
https://twitter.com/icannot_enough/status/1285906447381999623
And here’s a chart of the actual CEO Performance Award expense to date as well as my forecast for future quarters.
I should note that large variances to the timing and amounts are likely by quarter because the CFO has broad latitude to declare milestones probable, etc.:
I should note that large variances to the timing and amounts are likely by quarter because the CFO has broad latitude to declare milestones probable, etc.:
https://twitter.com/icannot_enough/status/1302641860159180805
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