Tesla Awards Elon Musk $29 Billion Worth of Company Shares
Tesla's Contested Compensation Package for Elon Musk: A Legal Saga Continues
Elon Musk's compensation package at Tesla, initially worth around $56 billion in 2018, has been the subject of ongoing legal battles and shareholder scrutiny. Despite these challenges, Tesla's board has recently approved a new, massive compensation package for Musk, valued between $29-$30 billion.
The new interim stock award requires Musk to stay with Tesla for two more years and hold stock until 2030, effectively increasing his ownership stake from about 13% to 15%. This move comes after two rulings by a Delaware judge that rescinded Musk's prior 2018 mega-pay plan, citing concerns about shareholder disclosure and conflicting interests. However, shareholders re-approved the plan in June 2024.
The original 2018 package, consisting of 12 tranches unlocked by Tesla achieving market and financial goals, would be worth approximately $86.9 billion based on current stock prices. The payout was in the form of a buyback of 96 million Tesla shares, purchased at a price of $23.34 per share.
The legal battle over the 2018 compensation plan is still ongoing, with appeals pending. In January 2024, a judge in Delaware overturned the plan, ruling that shareholders received "misleading" and "false" information about the board of directors and the compensation committee.
Tesla's board has emphasized the need to retain Musk amid intense competition for AI and technology talent, describing the new deal as crucial to keeping Musk focused on Tesla’s future challenges in AI, robotics, and robotaxis. The payout, amounting to $29 billion, was received by Musk on August 4, 2023.
The compensation plan has been criticized due to Tesla's financial difficulties in recent months. However, the shares were trading at $302.6 each at the close of the New York Stock Exchange on Friday.
Tesla has no clear timeline for resolution and is awaiting a decision and a date for a hearing before the Delaware Supreme Court. The saga surrounding Musk's compensation package continues, with the evolving situation being closely watched by shareholders and legal experts alike.
[1] Tesla's New Compensation Package for Elon Musk
[2] Delaware Judge Overturns Elon Musk's Compensation Plan
[3] Tesla Shareholders Approve New Compensation Package for Elon Musk
[1] With the recent approval of a new compensation package, valued between $29-$30 billion, by Tesla's board, there is a growing concern about the impact on general-news and finance, as well as the implications for justice and technology.
[2] Despite the legal victory for Tesla shareholders in January 2024, when a Delaware judge overturned the 2018 compensation package for Elon Musk, citing concerns over shareholder disclosure and conflicting interests, the legal saga regarding Musk's compensation continues to unfold.
