Elon Musk’s stock-based pay plan just earned him another $3 billion

Elon Musk doesn’t earn a salary for running Tesla, but is getting rich quick nonetheless.

The outspoken CEO of the electric-car maker is poised to unlock the fourth tranche in an eye-popping $50 billion performance-based compensation deal, bring his total stock awards to-date to roughly $11.8 billion.

Musk has been given the option to buy $3 billion worth of Tesla stock for a measly $500 million after the electric automaker’s six-month average market-cap hit $250 billion and Tesla reported its fifth-straight quarter of profitability, the company said in a Monday SEC filing.

To earn his full, $50 billion award, Musk must lead Tesla to a market cap of $650 billion by 2028. Tesla’s board signed off on the compensation package in March 2018, when the company’s market cap was just $52.46 billion. As of Monday afternoon, Tesla is the world’s most valuable automaker with a valuation of over $385 billion.

For his first three milestones, Musk received the option to buy 1.69 million Tesla shares at $350 a pop after each was certified. But following Tesla’s 5-for-1 stock split in August he now gets to buy 8.44 million shares at $70 each. Tesla’s stock is currently worth $413 a share.

Musk still has eight years left to clear eight more valuation hurdles, mostly in $50 billion increments, which stand to fetch him roughly $5 billion each. If Tesla doesn’t reach any other milestones, Musk will not receive any more money from Tesla.

The South Africa-born billionaire does not take a salary from Tesla, and only earns money through performance-based rewards.