Tesla Inc.’s (TSLA) CEO Elon Musk has earned a huge tranche of shares as an incentive payment valued over $700 million.

What Happened

In a regulatory filing to the Securities and Exchange Commission, the automaker disclosed that it would pay Musk in 1.7 million Tesla shares valued at $775 million on Thursday’s closing price.

Tesla informed the SEC, “As of the date of this proxy statement [Thursday], one of the 12 tranches under this award has vested and become exercisable, subject to Mr. Musk’s payment of the exercise price of $350.02 per share and the minimum five-year holding period generally applicable to any shares he acquires upon exercise.”

Why It Matters

It cannot be confirmed whether Musk has exercised the options. He earned the first part of his stock options for keeping the company’s market capitalization at $100 billion on a 30-day and six-month trailing average.
Musk is not paid any cash salary but owns about 18.5% of the company. That stake rose to 20.8% as of Thursday. The CEO owns 38.7 million shares of Tesla, of which 18.7 million are placed as collateral for his personal debt, reported CNBC.

The chief executive's incentive will be vested in 12 tranches with varying milestone requirements based on taking Tesla's market capitalization to the $650 billion mark.

Richard Tornetta, a shareholder, is suing Musk and Tesla board members, alleging the board was in breach of its fiduciary duty by awarding the CEO excessive compensation.

Musk claimed at the beginning of the month that Tesla stock price was too high. He also said he was “rethinking his “attachment to the material world.”

Thursday’s filing sets July 7 for Tesla’s annual shareholders meeting.

Tesla Price Action

Tesla shares traded 0.15% higher at $807 in the after-hours session on Thursday. The shares had closed the regular session 1.76% lower at $805.81.