Tesla’s (TSLA) stock price surged more than 5% this morning, boosting its market capitalization to over $100 billion — and triggering Elon Musk’s CEO compensation plan.

It also made the electric automaker more valuable than Volkswagen.

Tesla shareholders have been enjoying a seemingly unstoppable rally for the past month that saw Tesla’s stock pushed to new highs.

The company’s valuation has surged past several automakers to become the most valuable US automaker.

Now it has surged past even Volkswagen, an automaker who produces millions of vehicles per year.

At just over $100 billion, Tesla’s market capitalization is now second only to Toyota, which has quite the lead on everyone else (via Top 25 Automakers by Market Cap by u/brandude87):

The surge past $100 billion has also direct implications for CEO Elon Musk and his compensation.

While Musk doesn’t accept a salary from Tesla, shareholders granted him a very generous and ambitious stock compensation plan in 2018:

The plan is linked to a significant increase in revenue, adjusted EBITDA, and a massive increase in company valuation.

Each $50 billion increase in Tesla’s market capitalization would result in Musk receiving 1.69 million shares, which is currently worth almost $1 billion at today’s price.

If Tesla reaches all the milestones and a market cap of $650 billion, he would own about 30% of the company at that point, which would be a stake worth about $195 billion — making him the richest man on the planet.

At the time the plan was approved, naysayers claimed that even the first milestone of $100 billion market cap wasn’t achievable, but we reported last week that it seemed well within reach, and sure enough, Tesla has already surpassed it.

We expect to learn more about the situation and how it affects Musk’s compensation during Tesla’s earnings call next week.

Electrek’s Take

I know that Tesla is not just an automaker, and people don’t like it when we compare the valuation only within the sector, but Tesla is still perceived as mainly an automaker by most people, and it gets most of its revenue from selling cars.

Personally, I still see some upside to the rally. Tesla is likely going to report profits next week, and I think we could see the first Model Y deliveries soon.

As for Elon’s compensation, good for him. More than a million new shares are a lot to add to the float, but the milestones Tesla needs to achieve in order for him to get those shares make the deal worth it, in my opinion.

Disclosure: I am long TSLA.

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