Shares surged 9 per cent to a record high on Monday.
Last week, Tesla's stock market value hit almost US$89 billion, eclipsing the combined sum of General Motors' (GM) and Ford's for the first time. The company must hit also annual revenue or EBITDA milestones at the same time in order for Musk to get that first tranche.
In 2018, shareholders voted for Musk to be paid in company stock options only, based on operations and market capitalisation targets.
A full payoff for Musk, who is also the majority owner and CEO of the SpaceX rocket manufacturer, would surpass anything previously approved to US executives, based on Institutional Shareholder Services, a proxy advisor that recommended traders reject the pay package deal at the time.
The electric vehicle maker hits one of its most aggressive growth due to sales and earnings, and it just needs to reach an average of $100 billion for the first half of this year.
In addition, the increased value of Elon Musk's 18.9% stake in Tesla, which has doubled in six months to $18.3 billion, is the bigger prize.
Tesla's stock has become the most-shorted in the U.S. again, data from financial-analytics firm S3 Partners show.
"This is the very definition of pay for performance", stated Ian Keas, senior director at Longnecker & Associates, a compensation and governance consulting firm.
The turnaround began after Tesla reported an unexpected third-quarter profit, rapid construction pace of its factory in China, as well as better-than-expected auto deliveries in the fourth quarter due to high demand for the Model 3, the automaker's first mass-market vehicle. "That's the billion-dollar question".
Tesla shares dipped 1% to US$531.62 at the NY opening bell. Multiple reports have stated that Tesla's stock price has gone past the $500 mark for the first time.
In 2018, Tesla's board and shareholders authorized an unparalleled compensation plan for Musk, allowing him to earn options worth potentially more than $55 billion over the next decade.
Elon Musk owns 34 million of the company's shares and another 4.5 million options.