Musk set for another $29 billion Tesla payday

Musk set for another  billion Tesla payday


Tesla is proposing a new stock award of 96 million shares, valued at approximately $29 billion, to incentivize Elon Musk to remain as CEO. This new compensation package comes after a Delaware court voided Musk’s original 2018 pay deal, which was worth over $50 billion. The court ruled that the initial package was flawed and that Musk held undue influence over its creation, despite two separate shareholder votes to approve it. Tesla has since appealed that decision.

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The company is now asking shareholders to approve this new grant at their annual meeting on November 6th. The board argues that Musk’s leadership is critical as Tesla transitions to become a leader in AI and robotics. The new award is also designed to secure Musk’s tenure until at least 2027. If the Delaware court ultimately reinstates his original 2018 pay package, the new grant would be forfeited to prevent him from a “double dip.”

In a letter to shareholders, board chair Robyn Denholm and board member Kathleen Wilson-Thompson acknowledged the extensive demands on Musk’s time but expressed confidence that the new award would “incentivize Elon to remain at Tesla.” They also noted that Musk “has not received meaningful compensation for eight years.”

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This push to retain Musk comes at a challenging time for Tesla. The company’s stock has dropped over 20% this year, and competition from legacy automakers and Chinese rivals is increasing. The Cybertruck has been widely considered a flop, and a new robotaxi service in Austin has fallen short of Musk’s predictions.

Musk, who currently holds a 13% stake, has expressed a desire for more control over the company’s direction. “I want to find that I’ve got so little control that I can easily be ousted by activist shareholders after having built this army of humanoid robots,” he stated in a recent earnings call, emphasizing his need for sufficient control to ensure the company’s mission is upheld.