Comment on What are the practical effects of the recent court ruling nullifying Musk's Tesla pay package?
zkfcfbzr@lemmy.world 9 months agoYour article says:
As part of a compensation package Tesla finalized in 2018, Mr. Musk received options to buy 304 million shares that are now worth more than $50 billion. While he has met the goals needed to receive those options, Mr. Musk does not appear to have converted them into shares of Tesla. If he had, he would be barred from selling them for five years.
What are options? Does this mean he didn’t receive this compensation yet, and now he simply won’t receive it, assuming the company doesn’t appeal or move states like the article mentions? It says he had the option to buy 304 million shares - I assume he can buy them at a deep, deep discount compared to their current price?
520@kbin.social 9 months ago
It's a form of contract that allows (but does not obligate) a person to buy X amount of shares for Y price, regardless of the market rate.
zkfcfbzr@lemmy.world 9 months ago
So since he hasn’t executed on the options, there’s nothing he has to actually pay back, but he also won’t be allowed to exercise those options and purchase what would have been $56 billion worth of dirt cheap stocks?
I also assume that calculations of his net worth did take the options into account, so assuming the order stands, it’s effectively an immediate $56 billion hit to those calculations?
520@kbin.social 9 months ago
Yes. Options have expiry dates. Him letting the options expire cuts off those cheap stocks for him.
Net worth calculations take all known assets into account, this includes options.
zkfcfbzr@lemmy.world 9 months ago
Thanks. Do you happen to know why he wouldn’t have executed the options before this suit? Like you mention they expire - surely he never had any intention of letting them expire though? Was there some benefit to waiting them out?