Tesla has approved a restricted stock award of 96 million shares, worth about US$29 billion (or roughly C$39 billion), to try and persuade the billionaire to stay as the head of the company following a court ruling regarding his original pay package.
According to a letter to shareholders posted on X, the new award will comprise of the previously-mentioned 96 million restricted shares of stock, alongside a requirement that Musk serve in a senior leadership role for the entire two-year vesting term, alongside other tax and compensatory requirements.
The letter also mentions that if the court fully reinstates the 2018 CEO performance award, then Musk is required to return this new interim award, or a portion of the 2018 performance award. The letter described it as no double-dipping.
Back in December of 2024, a Delaware court voided Musk’s pay package (which had a value of more than US$50 billion,) arguing that the deal was “flawed and unfair to shareholders.” The court also argued that Musk held “undue influence” over Tesla’s composition, essentially meaning he could act without repercussions. However, shareholders voted twice to approve the compensation, but the judge still upheld their ruling. Tesla has since appealed this decision.
Tesla is also arguing that they are on the cusp of becoming a leader in AI and Robotics, stating that they require “a leader who combines strategic foresight, adaptability, and relentless execution to outperform competition and inspire the team,” adding that Elon fits these requirements for the organization.
Despite the controversy surrounding U.S. President Donald Trump and the Department of Government Efficiency, which caused the automaker’s stock and sales to plummet, Tesla still sees Musk’s involvement as essential to the company’s future. Earlier this year, Tesla’s board created a special committee comprised of board chair Robyn Denholm and board member Kathleen Wilson-Thompson to explore new compensation methods for Elon, who, as per the company’s letter to shareholders, hadn’t been compensated in eight years.
Source: The Verge
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