Elon Musk is closer than ever to a $2.4 billion payout as Tesla's stock skyrockets

• Tesla's stock rally has brought CEO Elon Musk closer than ever to the second tranche of his compensation package, worth $2.4 billion.
• To unlock the second tranche, Tesla's average trailing market capitalization must meet or exceed $150 billion over 30 days and six months.
• Tesla's average trailing market cap has been above $150 billion for a while, and it is poised to soon hit the six-month average as well.
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Tesla's searing stock rally is bringing its CEO Elon Musk closer than ever to the second payout of his moonshot compensation package, worth $2.4 billion.

Shares of Tesla have skyrocketed more than 275% year-to-date, fueled by better-than-expected earnings, solid vehicle deliveries, and a slew of Wall Street analyst upgrades. The soaring stock price has also pushed the market capitalization of the company to more than $290 billion, making it the highest-valued automaker in the world.

Now, the company is set to hit another milestone in Musk's CEO compensation package — the six-month average trailing market capitalization is nearing $150 billion. Once the threshold is met, it would unlock 1.69 million stock options for Musk, who could sell the shares to reap a $2.4 billion gain.

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Tesla's rally this year has pushed Musk's net worth to $70.5 billion, meaning he's officially richer than Warren Buffett, and is now ranked seventh on the Bloomberg Billionaire's Index.

Next, investors will be watching for Tesla's second quarter 2020 earnings, set to be released July 22. If the company reports its fourth consecutive quarterly profit, it will have reached a key milestone to be considered for inclusion in the S&P 500 index.

Musk's mega-compensation package consists of 20.3 million Tesla options split into 12 tranches tied to specific goals such as sales targets, Ebitda, and market capitalization.

If Musk unlocks all of the tranches, the total payout would be worth more than $55 billion, according to Tesla. Musk doesn't accept any other salary from the automaker.

In a May SEC filing, Tesla's board of directors confirmed that Musk had unlocked the first tranche of the compensation package.