This article is more than 7 months old

This article is more than 7 months old

The Tesla founder, Elon Musk, has taken the first step to becoming $50bn (£38bn) richer after the value of the electric car company surged past $100bn.

Musk, already a multibillionaire with a net worth estimated at about $30bn, secured approval in 2018 for a pay deal that would dwarf existing records for renumeration if it was paid out in full.

Under the scheme corporate governance experts have described as “staggering”, Musk must build Tesla into a $650bn company over the next 10 years.

Hitting this landmark would make Tesla one of the world’s most valuable tech companies – worth more than seven times the combined value today of automotive powerhouses Ford and General Motors .

Provided Tesla also hits ambitious revenue and profit targets, and assuming Musk remains its chief executive, such growth would also trigger payments in stock worth about $50bn over the course of the scheme.

At the time the deal was agreed in March 2018, Tesla was valued by the stock market at $54.6bn. Its share price has nearly doubled since then, breaking the $100bn barrier on Wednesday.

Improved sentiment about Tesla on Wall Street is partly down to a surprise third-quarter profit of $143m, which bolstered hopes that the company could end its habit of making significant losses.

If Musk can keep the stock market value at above $100bn on average over the next six months, he will be entitled to the first of up to 12 stock payouts, worth around $350m each.

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The pay deal is staggered so that he receives further awards for every $50bn Tesla increases in stock market value, up to a maximum of $50bn in shares if the company achieves a valuation of $650bn by 2028.

That is still some way behind trillion-dollar companies such as Apple, the first to reach the Wall Street milestone, and Google’s parent company, Alphabet.

Tesla supporters have argued that the way the pay plan is structured will help keep Musk focused on the company at a time when he is also increasingly involved in SpaceX, his space exploration company, and other ventures.