Tesla’s market capitalization keeps reaching new highs since the past few weeks and while most people are concerned about the company starting to be worth more than bigger automakers, like Nissan, it also has other interesting implications.

In the past, Elon Musk has associated his potential departure from his role as CEO with completing the milestones of his CEO stock option compensation plan – especially the production of the Model 3.

In 2012, Tesla’s board granted Musk a new stock option plan called ‘2012 CEO Grant’ with 5,274,901 stock options. It vests in 10 tranches each associated with a milestone and a sustained $4 billion increase in market capitalization over 6 months.

It was granted when Tesla’s was worth $3.2 billion and therefore, the company needs to maintain a minimum of $43.2 billion ($3.2 billion + 10 x $4 billion) market cap for 6 months before the stock options from all the milestones can be vested.

Tesla reached a market cap of $43.2 billion for the first time last week and it is now ahead of Musk’s completed milestones. Here are the 10 milestones:

Successful completion of the Model X Alpha Prototype; [completed]

Successful completion of the Model X Beta Prototype; [completed]

Completion of the first Model X Production Vehicle; [completed]

Successful completion of the Model 3 Alpha Prototype; [completed]

Successful completion of the Model 3 Beta Prototype;

Completion of the first Model 3 Production Vehicle;

Gross margin of 30% or more for four consecutive quarters;

Aggregate vehicle production of 100,000 vehicles; [completed]

Aggregate vehicle production of 200,000 vehicles; and

Aggregate vehicle production of 300,000 vehicles.

As of the end of the last reported quarter (Q3 2016), Tesla’s board estimated that all the other milestones were considered “probable of achievement” in the short-term except for achieving a gross margin of 30% or more for four consecutive quarters.

If Tesla sticks to its goals, all those milestones could be completed and vested within the next 6 months if the company also maintains its current market cap.

Musk committed to staying CEO until at least Tesla hits volume production of the Model 3, which could happen before the end of the year, according to his own estimate. If he instead sticks to his ‘2012 CEO Grant’, the 30% gross margin milestone could make him stay in his role for a while.

Tesla has been hitting close to 30% with the Model S and X, but early Model 3 production is expected to bring the average down for a while and since it needs to be maintained for four consecutive quarters, it could push the milestone further down the road.

Either way, it’s important to keep in mind that while Musk might leave his role as CEO, he stated in the past that he plans to stay on as Chairman of the board, which shouldn’t be difficult for him since he still owns 22% of the company, and as Product Architect.

Of course, it would still result in him spending less time at Tesla and likely more time at SpaceX, but it would also give an opportunity for the company to get a CEO all to itself.

Let us know who you think could take over the role of Tesla CEO in the comment section below. CTO and co-founder JB Straubel? Sales and Service President Jon McNeill? Someone from outside the firm?

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