On Jan. 21, 2018, Tesla, the electric car manufacturer (also in the business of sustainable energy generation and storage), granted its chairman and chief executive officer, Elon Musk, an option, subject to shareholders’ approval, to acquire 20,264,042 shares of Tesla (representing 12 percent of the then outstanding shares). Tesla’s shares are traded on NASDAQ. As of the grant date of the option, the market cap of Tesla was approximately $59 billion.

The grant-date value of the option, according to the proxy statement for the special meeting noted below, was approximately $2.6 billion, based on a so-called “Monte Carlo” option pricing model, a mathematical model used to provide an estimate for the fair value of an option at the time of grant. The option exercise price is $350.02 per share, the January 19 closing price for a share of Tesla stock. To the author’s knowledge, this is the largest stock option ever granted by a public company to an executive. According to the same proxy statement, Mr. Musk “will receive no salary, no cash bonuses and no time-based equity awards that vest solely through the passage of time (that is, simply by continuing to show up for work).”