A full payoff for Musk, who is also the majority owner and CEO of the SpaceX rocket maker, would surpass anything previously granted to US executives, according Institutional Shareholder Services, a proxy advisor that recommended investors reject the pay package deal at the time.
Musk receives no salary or cash bonus, only options that vest based on Tesla's market cap and milestones for growth. "This is the very definition of pay for performance," said Ian Keas, senior director at Longnecker & Associates, an executive compensation consulting firm. "But is he the only individual that could serve in that seat as CEO and deliver that value to shareholders? That's the billion dollar question."
Musk's potential payout compares to the $638 million received by Snap Inc founder Evan Spiegel in 2017 after the social network company's initial public offering. In 2018, Walt Disney CEO Robert Iger earned stock grants worth as much as $149.6 million, including awards related to Disney's purchase of film and television assets from Twenty-First Century Fox.
Musk has transformed Tesla from a niche car maker with production problems into the global leader in electric vehicles, with US and Chinese factories. So far it has stayed ahead of more established rivals including BMW and Volkswagen.
Last week, Tesla's stock market value hit nearly $89 billion, eclipsing the sum of General Motors' and Ford's for the first time, 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 was valued at about $53 billion when shareholders approved the pay package in January 2018 and faced a cash crunch, production delays and increasing competition from rivals. It was viewed as massively ambitious because it implied the company's value could grow as much as ten-fold in 10 years.