Robyn Denholm’s Tesla bonanza

Denholm, who left her post as chief financial officer and head of strategy at Telstra shortly after taking on the big job at Tesla, has since defended Musk’s use of Twitter – although she could be forgiven for feeling a little twinge of stress every time her smartphone pings with a new tweet from the boss.

Happily, though, there is no shortage of compensation for that stress. And Tesla’s soaring share price has delivered something of a windfall for Denholm in the past 12 months, as she’s spent $US14 million ($18 million) exercising Tesla options, most of which she immediately sold, generating $US101 million ($134 million) in proceeds.

According to Tesla’s annual report, Denholm started 2020 with 206,165 options over ordinary shares, although that was before a five-for-one stock split in August.

Her original pay packet saw her receive 8000 options a year as well as a $US300,000 salary, but as the pandemic struck she told the board in July that she wanted Tesla to "eliminate the future payment to her of all cash retainer", citing a desire in her board leadership role to have 100 per cent of her compensation "at risk and aligned with the interests of stockholders".

Denholm exercised and immediately sold more than 26,000 options in July before a busy finish to the year when she exercised more than 130,000 options across three tranches, all of which have an exercise price of just $US51.99. On December 7, when Denholm exercised and sold her last tranche, the Tesla share price was hovering above $US600.

Exactly how many shares and options Denholm retains is confused somewhat by the stock split in August and will be released in Tesla’s next annual report. But it’s safe to assume given Tesla’s extraordinary rise that Denholm will be under consideration for The Australian Financial Review Rich List, which had a cut-off of $540 million last year.

Where Tesla’s share price will head in 2021 isn’t easy to predict. US broker Wedbush Securities, which has a 12-month price target of $US715 a share and a bullish one of $US1000, predicted last week that strong sales in China could push Tesla’s annual deliveries to 1 million as early as 2022.

But while Goldman Sachs has a target price of $US780 a share on the stock – it believes "the shift towards battery electric vehicle adoption is accelerating and will occur faster than our prior view" – JPMorgan has a share price target of just $US90.

JPMorgan said last month the stock was "by virtually every conventional metric, not only overvalued, but dramatically so".