Tesla Proposes $29 Billion Compensation Package for Elon Musk Amid AI Talent War

Tesla proposes $29B comp package for Elon Musk amid 'AI talent war' | TechCrunch

Tesla has announced a proposed compensation package for CEO Elon Musk that would be worth around $29 billion in shares, with the company citing the "ever-intensifying AI talent war and Tesla's position at a critical inflection point" as reasons for the payout. The new plan will be put to a vote at the company's annual shareholder meeting, which is scheduled for November. It will also be entirely voided if the Delaware Supreme Court decides to overturn a judge's January 2024 decision to strike down Musk's 2018 compensation package because of how it was negotiated behind the scenes. Musk has threatened to stop working on AI and robotics at Tesla unless he gains more control over the company. Those threats preceded what is now a multi-million dollar talent war among the biggest companies in the artificial intelligence space, along with a rush of mergers and acquisitions. Musk has simultaneously built up his own AI company outside Tesla called xAI, which now owns X, his social media platform. Tesla said Monday that its board of directors formed a special committee earlier this year consisting of chairwoman Robyn Denholm and board member Kathleen Wilson-Thompson in order to sort out a new package. The award they ultimately decided on involves giving Musk 96 million shares that will vest in two years, provided that he "serve continuously in a senior leadership role at Tesla" during that term and holds the stock for five years. Unlike Tesla's previous award to Musk, this new package does not appear to be tied to goals like increasing the company's stock price. At Tesla's Monday pre-market trading price, that would be worth around $29 billion. Musk will have to pay a $23.34-per-share purchase price, bringing the total current value of the award to him to roughly $26.7 billion. Depending on how the Delaware Supreme Court rules on Tesla's appeal, the package may be forfeited so "there cannot be any 'double dip,' according to Tesla. "Elon will not be able to keep this new award in addition to the options he will be awarded under the 2018 CEO Performance Award should the courts rule in our favor," the company wrote. Tesla said Musk and his brother Kimbal, who is also a board member, recused themselves from the process of constructing this new compensation package. Musk's involvement in the 2018 compensation package, which was worth around $56 billion, was one of the reasons why Delaware Chancery Court judge chancellor Kathaleen McCormick decided to strike it down following a trial sparked by a shareholder lawsuit. McCormick said the process of creating that 2018 plan was "deeply flawed" because of Musk's input and his deep connections to the people on Tesla's board. She also criticized that plan for not including any terms that would bind Musk to Tesla for "any set amount of time" -- a likely reason for the two-year pledge included in the new plan. McCormick's decision caused an uproar among Tesla's largest fans and many of its shareholders. It's also what inspired the company to re-incorporate from Delaware to Texas, a state with fewer established shareholder protections written into its laws. Tesla went as far as holding a shareholder vote to "re-affirm" the pay package. But McCormick confirmed her decision in December 2024, saying the vote and Tesla's legal arguments were "unprecedented theories [that] go against multiple strains of settled law."

Tesla hands $29B comp package to Elon Musk amid 'AI talent war' | TechCrunch

Tesla's board of directors has announced a new compensation package for CEO Elon Musk worth around $29 billion in shares, with the company citing the "ever-intensifying AI talent war and Tesla's position at a critical inflection point" as reasons for the payout. The massive pay package is being allocated through a 2019 Equity Incentive Plan that is already approved by shareholders, so it won't go to a vote, according to a regulatory filing and Ann Lipton, a professor at the University of Colorado Law School. Tesla says it will put "a longer-term CEO compensation strategy" to a vote at the company's annual shareholder meeting, which is scheduled for November. Musk's new compensation plan will be entirely voided if the Delaware Supreme Court decides to overturn a judge's January 2024 decision to strike down Musk's 2018 compensation package because of how it was negotiated behind the scenes. That pay package was worth around $56 billion. Musk has threatened to stop working on AI and robotics at Tesla unless he gains more control over the company. Those threats preceded what is now a multi-million dollar talent war among the biggest companies in the artificial intelligence space, along with a rush of mergers and acquisitions. At the same time, Musk has built up his own AI company outside Tesla called xAI, which now owns X, his social media platform. This has happened while Tesla's sales growth has vanished and its brand has been damaged by Musk's involvement in the Trump administration. Tesla said Monday that its board of directors formed a special committee earlier this year consisting of chairwoman Robyn Denholm and board member Kathleen Wilson-Thompson in order to sort out a new package. The award they ultimately decided on involves giving Musk 96 million shares that will vest in two years, provided that he "serve continuously in a senior leadership role at Tesla" during that term and holds the stock for five years. Unlike Tesla's previous award to Musk, this new package does not appear to be tied to goals like increasing the company's stock price. At Tesla's Monday pre-market trading price, that would be worth around $29 billion. Musk will have to pay a $23.34-per-share purchase price, bringing the total current value of the award to him to roughly $26.7 billion. Depending on how the Delaware Supreme Court rules on Tesla's appeal, the package may be forfeited so "there cannot be any 'double dip,' according to Tesla. "Elon will not be able to keep this new award in addition to the options he will be awarded under the 2018 CEO Performance Award should the courts rule in our favor," the company wrote. Tesla said Musk and his brother Kimbal, who is also a board member, recused themselves from the process of constructing this new compensation package. Musk's involvement in the 2018 compensation package was one of the reasons why Delaware Chancery Court judge chancellor Kathaleen McCormick decided to strike it down following a trial sparked by a shareholder lawsuit. McCormick said the process of creating that 2018 plan was "deeply flawed" because of Musk's input and his deep connections to the people on Tesla's board. She also criticized that plan for not including any terms that would bind Musk to Tesla for "any set amount of time" -- a likely reason for the two-year pledge included in the new plan. McCormick's decision caused an uproar among Tesla's largest fans and many of its shareholders. It's also what inspired the company to re-incorporate from Delaware to Texas, a state with fewer established shareholder protections written into its laws. Tesla went as far as holding a shareholder vote to "re-affirm" the pay package. But McCormick confirmed her decision in December 2024, saying the vote and Tesla's legal arguments were "unprecedented theories [that] go against multiple strains of settled law."

Tesla proposes giving Elon Musk $29 billion so he stays CEO

Tesla approved a restricted stock award of 96 million shares, worth about $29 billion, to "incentivize" the controversial billionaire to remain at the head of the company during a protracted legal battle over his original pay package. Last year, a Delaware court voided Musk's pay package, valued at more than $50 billion, arguing that the deal was flawed and unfair to shareholders and that Musk held undue influence over its composition. Shareholders had voted twice to approve the hefty compensation, but the judge still upheld her ruling blocking it. Tesla has appealed the decision to the Delaware Supreme Court. Now, the company is asking shareholders to approve this new award, arguing that Tesla is on the cusp of becoming a leader in AI and robotics, requiring Musk's steady hand on the helm. To be sure, Tesla's position is shakier than ever. Musk's support for President Donald Trump and his work at the Department of Government Efficiency to fire tens of thousands of federal workers and cancel humanitarian aide programs has spawned a nationwide protest movement and a steep drop in sales. Tesla's stock has shed more than 20 percent of its value so far this year. Still, Tesla's board sees Musk's continued involvement as essential to the company's future. Earlier this year, Tesla's board created a special committee compromised of board chair Robyn Denholm and board member Kathleen Wilson-Thompson to consider new ways to compensate Musk, who the board claims "has not received meaningful compensation for eight years." "While we recognize that Elon's business ventures, interests and other potential demands on his time and attention are extensive and wide-ranging ... we are confident that this award will incentivize Elon to remain at Tesla and focus his unmatched leadership abilities on further creating shareholder value for Tesla shareholders and attracting and retaining talent at Tesla," Denholm and Wilson-Thompson wrote in a letter to shareholders. The board noted that if the Delaware courts fully reinstate Musk's 2018 pay package, the new interim grant would be forfeited or offset so there is "no double dip." In accepting the new stock, Musk would agree to serve as head of Tesla until 2027. Shareholders will vote on the new deal at their annual meeting, which is scheduled for November 6th. After years of exponential growth, the sudden reversal in Tesla's fortune has left many investors and supporters with whiplash. As Musk slid deeper into politics, investors have urged him to stay focused on Tesla and its costly -- and questionable -- project to build more self-driving cars and humanoid robots. The company rolled out its first robotaxi service in Austin, Texas, last month -- although the service fell short of Musk's earlier predictions. The company's only new product since 2020, the Cybertruck, has widely been considered a flop. And competition from legacy automakers, especially those in China, has been sapping Tesla's resources. Musk is currently Tesla's largest shareholder, with a 13 percent stake in the company. But the CEO has said he wants more control over the company in order to have more sway over its mission -- which this plans aims to produce. "That is a major concern for me, as I've mentioned in the past, and I hope that is addressed at the upcoming shareholders meeting," Musk said in a recent earnings call, in response to a question about his voting stake. "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 ... I've mentioned before, I think my control of Tesla should be enough to ensure that it goes in a good direction, but not so much control that I can't be thrown out if I go crazy."

Tesla approves share award worth $29 billion to CEO Elon Musk

Aug 4 (Reuters) - Tesla (TSLA.O), opens new tab has granted CEO Elon Musk 96 million shares worth about $29 billion, a move aimed at keeping the billionaire entrepreneur at the helm as he fights a court ruling that voided his original pay deal for being unfair to shareholders. In 2024, a Delaware court voided Musk's 2018 compensation package, valued at over $50 billion, citing that the Tesla board's approval process was flawed and unfair to shareholders. Musk kicked off an appeal in March against the order, claiming a lower court judge made multiple legal errors in rescinding the record compensation. Earlier this year, the EV maker said the board had formed a special committee to consider some compensation matters involving Musk, without disclosing any details. Tesla is at a turning point as Musk, its largest shareholder with a 13% stake, shifts focus from a promised affordable EV platform to robotaxis and humanoid robots, positioning the company more as an AI and robotics firm than an automaker. "While we recognize Elon's business ventures, interests and other potential demands on his time and attention are extensive and wide-ranging ... we are confident that this award will incentivize Elon to remain at Tesla," the special committee said in the filing. The award is designed to gradually boost Musk's voting power, something he and shareholders have consistently said was key to keeping him focused on Tesla's mission, it added. Musk must pay Tesla $23.34 per share of restricted stock that vests, which is equal to the exercise price per share of the 2018 CEO Award, it said in the filing. Tesla shares rose more than 2% in premarket trading. Reporting by Aditya Soni in Bengaluru; Editing by Anil D'Silva Our Standards: The Thomson Reuters Trust Principles., opens new tab

Tesla approves 96 million-share award to CEO Elon Musk

Musk must pay Tesla $23.34 per share of restricted stock that vests, which is equal to the exercise price per share of the 2018 CEO Award, it said in the filing. In 2024, a Delaware court voided Musk's 2018 compensation package, valued at over $50 billion, citing that the Tesla board's approval process was flawed and unfair to shareholders. Musk kicked off an appeal in March against the order, claiming a lower court judge made multiple legal errors in rescinding the record compensation. Earlier this year, the EV maker said the board had formed a special committee to consider some compensation matters involving Musk, without disclosing any details. Tesla is at a turning point as Musk, its largest shareholder with a 13% stake, shifts focus from a promised affordable EV platform to robotaxis and humanoid robots, positioning the company more as an AI and robotics firm than an automaker.

Tesla awards boss Elon Musk $29bn in shares

The award should boost Musk's voting power on the electric car company's board. "It is imperative to retain and motivate our extraordinary talent, beginning with Elon", Tesla's board wrote on X, a platform owned by Musk, adding that "no one matches Elon's remarkable combination of leadership experience, technical expertise". The company said the billionaire had a "proven track record" in building "revolutionary and profitable businesses". Tech firms trying to assert themselves in the AI sector have been offering huge sums to workers at rivals in an effort to persuade them to join them and boost their development. Facebook founder Mark Zuckerberg was said to have recently tried to lure top developers from ChatGPT-creator OpenAI with million-dollar pay deals. Meanwhile Microsoft's AI division, headed up by former Google DeepMind co-founder Mustafa Suleyman, recently gained several new hires from Google's ranks. Tesla the company was at an "inflection point" and needed Musk's prowess as it pivots from being an electric vehicle firm to an AI and robotics focussed company. The company added that the share ward would be attractive for Musk "with other "demands on his time and attention". Musk's other roles include executive positions at xAI, Neuralink, and The Boring Company, which makes tunnels and other infrastructure in the US. He recently announced that he was stepping back from politics, after a stint as US President Donald Trump's advisor.

Elon Musk awarded $30 billion payout in Tesla shares

Tesla's board approved 96 million restricted shares, with a market value of nearly $30 billion, to CEO Elon Musk on Monday, calling it a demonstration of faith. As a condition to vest the shares, Musk has to continue serving as Tesla's chief executive for at least two more years and cannot sell the stocks for five years. A Delaware court battle is taking place over Musk's 2018 compensation package that would have given the CEO $55.8 billion in Tesla shares, claiming that board members approved the payout without sufficient concern for shareholders. If Musk wins that case and secures the 2018 package, the one announced Monday would no longer apply. In a letter to shareholders posted on X, the social-media site owned by Musk, Tesla board members Robyn Denholm and Kathleen Wilson-Thompson wrote: "Elon has demonstrated these unmatched leadership abilities time and time again." Denholm and Wilson-Thompson emphasized the importance of keeping Musk focused on Tesla as the electric vehicle company moves further into artificial intelligence and robotics. The stock award appears aimed at addressing, for now, looming questions over Musk's continued commitment to the company. Last year, Musk publicly pleaded for more control over the automaker, as the fight over his compensation package in Delaware played out. "I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control. Enough to be influential, but not so much that I can't be overturned," he posted on X, in what appeared to be a threat to take his AI bets elsewhere across his empire. "Unless that is the case, I would prefer to build products outside of Tesla." In their letter to shareholders Monday, Tesla board members nodded to the artificial intelligence arms race as a motivating factor. "The war for AI talent is intensifying, with recent months including multi-billion-dollar acquisitions of companies and nine-figure cash compensation packages for non-founder, individual AI engineers," they wrote. "Even among this group of highly talented individuals, no one matches Elon's remarkable combination of leadership experience, technical expertise, and, arguably most importantly, decades-long proven track record of building the most revolutionary and profitable businesses across different industries."

Tesla board awards Elon Musk $30bn worth of shares

Chief executive will pay $2bn to buy 96m shares at same price as 2018 pay package rescinded by US court Tesla's board has approved awarding $30bn (£23bn) worth of shares to its chief executive, Elon Musk, after a US court ruled against a previous pay deal for the world's richest person. Musk will pay $2bn to buy 96m shares in the electric carmaker at the same price as the 10-year pay package agreed in 2018, which is stuck in legal limbo awaiting a court date for an appeal. The award was based on a recommendation from a "special committee" of the board. The announcement in a financial filing was accompanied by a shareholder letter from two members of the committee, the Tesla chair, Robyn Denholm, and Kathleen Wilson-Thompson. It described the award as a "good faith" payment to Musk after the previous pay deal worth $56bn was rescinded in 2024 by a judge in Delaware, where the company was incorporated until June that year. "To recognise what Elon has accomplished and the extraordinary value he delivered to Tesla and our shareholders, we believe we must take action to honour the bargain that was struck in 2018. After all, 'a deal is a deal,'" wrote the directors. They also alluded to Musk's foray into Republican politics, which has damaged the Tesla brand and sales - as well as raising concerns among shareholders. Denholm and Wilson-Thompson said they had reviewed investors' letters and posts on X - the social media network owned by Musk - and acknowledged worries about his focus on his job. "From those communications, we know that one of your top concerns is keeping Elon's energies focused on Tesla. This award is a critical first step toward achieving that goal," they wrote. The award is worth about $30bn based on a share price of $308 in pre-market trading. Musk is worth $350bn, according to the Bloomberg billionaires index. Over the past year, Musk has become embroiled in US politics and a political relationship with Donald Trump that turned toxic once the president entered the White House for the second time, a feat assisted by the Tesla chief executive's financial and personal support. The furore put off left-leaning Tesla buyers inside and outside the US, although stiff competition in the electric car market has also affected sales. A survey from the research firm S&P Global Mobility shared with Reuters showed Tesla's customer loyalty plunged since Musk endorsed Trump. It found 49.9% of Tesla-owning households in the market for a new car bought another Tesla last March. This was just below the industry average, but was down from 73% in June 2024. It edged back up to 57.4% in May this year. Tom Libby, a S&P analyst, said the fall was "unprecedented", adding: "I've never seen this rapid of a decline in such a short period of time." Musk is Tesla's largest shareholder with a 13% stake. The company is shifting its focus to robotaxis and humanoid robots, in a move that positions Tesla more as an artificial intelligence and robotics firm than an automaker. "While we recognise Elon's business ventures, interests and other potential demands on his time and attention are extensive and wide-ranging ... we are confident that this award will incentivise Elon to remain at Tesla," wrote the directors. The award is designed to gradually increase Musk's voting power, something he and shareholders had consistently said was key to keeping him focused on Tesla's mission, the directors added. Tesla shares, which have fallen nearly 20% so far this year, rose more than 2% in premarket trading.

Tesla grants Elon Musk $29 billion pay package, fights to give him $55.8 billion

Tesla CEO Elon Musk will gain approximately $29 billion in shares under a new compensation package, in an effort to at least partially adhere to a $55.8 billion deal from 2018 which was thrown out by a U.S. court last year. In a filing to the U.S. Securities and Exchange Commission (SEC) on Sunday, Tesla announced that it shall grant Musk 96 million shares under a new 2025 CEO Interim Award. Already approved by shareholders, the award enables Musk to purchase the stock for around $2 billion at $23.34 per share -- the same price that was agreed to in his blocked 2018 compensation package. This new deal requires Musk to take a senior leadership role at Tesla for the next two years, and prohibits him from selling or transferring the shares for five years. Posting a lengthy statement on Tesla's official X account, directors Robyn Denholm and Kathleen Wilson-Thompson stated that this compensation package is another effort to "honor the bargain that was struck [with Musk] in 2018." This Tweet is currently unavailable. It might be loading or has been removed. Musk's 2018 Tesla compensation package was thrown out last year after a Delaware court found the board of directors had breached their duty to shareholders when establishing the $55.8 billion deal. Specifically, Tesla's directors had failed to negotiate or evaluate the value Musk actually provided, instead simply agreeing to whatever the billionaire proposed. Tesla and Musk's later bid to reinstate the 10-year compensation package was also rejected, the judge unimpressed by their attempt to overturn a U.S. court judgement with a subsequent shareholder vote. Tesla has since taken the matter to the Delaware Supreme Court in hopes of having the deal restored. In the meantime, the company is also trying another tactic to grant its billionaire CEO further billions. In their statement, Denholm and Wilson-Thompson said that the stock given to Musk under this week's new award amounts to approximately one third of his total 2018 compensation package, and is considered an interim measure while they work on reinstating the whole deal. "[W]e have recommended this award as a first step, 'good faith' payment to Elon," they wrote. "It is imperative to retain and motivate our extraordinary talent, beginning with Elon.... While we recognize that Elon's business ventures, interests and other potential demands on his time and attention are extensive and wide-ranging, including his leadership roles at xAI, SpaceX, Neuralink, X Corp., and The Boring Company as well as his other interests, we are confident that this award will incentivize Elon to remain at Tesla..." If the Supreme Court ultimately rules in Tesla and Musk's favour, the CEO will be required to either return this week's award or forfeit a portion of the 2018 package so that "there cannot be any 'double dip.'" Denholm and Wilson-Thompson also repeatedly praised Musk as demonstrating "unmatched leadership," an apparent effort to demonstrate what value he offers that could merit such outsized compensation. The court had considered $55.8 billion disproportionate to the value Musk offered Tesla when deciding to block his 2018 compensation package. "[N]o one matches Elon's remarkable combination of leadership experience, technical expertise, and, arguably most importantly, decades-long proven track record of building the most revolutionary and profitable businesses across different industries," they wrote. The board's breathless admiration for Musk was also considered in the court's decision to throw out his 2018 compensation last year. Noting at the time that veneration of the billionaire had even moved one director to tears, the court found that it was unclear whether they were acting for Musk or Tesla in making the $55.8 billion deal. Denholm and Wilson-Thompson's X post states that Tesla is currently working on a "longer-term CEO compensation strategy," which will be put to a shareholder vote on Nov. 6. The richest man in the world, Musk has a current net worth of over $400 billion, which exceeds the GDP of Egypt. Responding in January to people questioning why he'd need a large Tesla compensation package to motivate him, Musk framed it as a matter of wanting dominant control over the company. "I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control," Musk wrote. "Enough to be influential, but not so much that I can't be overturned. Unless that is the case, I would prefer to build products outside of Tesla." Musk currently has a 13 percent stake in Tesla, making him the company's largest shareholder. This new deal will increase his stake to around 16 percent. Tesla has struggled significantly this year, experiencing a 71 percent drop in profit during Q1. The company suffered considerable reputational damage due to Musk's work with the Trump administration, with sales down globally, stock falling, and at least one early investor calling for the CEO to resign. Such problems haven't been helped by issues plaguing Tesla's vehicles themselves, including a growing list of incidents with the company's Robotaxis. Musk appeared to take a step back from politics at the end of May, leaving his position as de facto head of the Department of Government Efficiency (DOGE) and expressing his intention to spend more time focusing on his various companies. However, he has since stated that he intends to start his own political party, a venture that seems likely to draw him away from his businesses once more.

Tesla hands Elon Musk $29bn to stop him leaving

Tesla has handed its chief executive, Elon Musk, shares worth almost $30bn after the billionaire warned he could leave unless he was given greater control over the company. In a filing, Tesla said it had awarded Mr Musk 96m shares valued at roughly $29bn as part of an interim 2025 award. The pay package comes amid a long-running dispute over a separate 2018 award for Mr Musk, worth $56bn. A Delaware court last year voided the package following a shareholder challenge, branding it "excessive" and saying the board's process to determine the sum was flawed. In March, Mr Musk launched an appeal to restore the deal, which was based around share options contingent on hitting performance targets. He argued that the judge had made multiple legal errors. Tesla also formed a new special committee to review his pay. In the meantime, Mr Musk has been piling pressure on the board by warning he could leave unless he was handed a larger stake. The entrepreneur is the company's largest shareholder, with a 12.7pc stake, but Mr Musk has said he would be "uncomfortable" leading Tesla without a holding of around 25pc. He warned that he was vulnerable to being kicked out of the company by activist investors. During an investor call last month, he said: "I think my control over Tesla should be enough to ensure that it goes in a good direction, but not so much control that I can't be thrown out if I go crazy." In a letter to shareholders on Monday, Tesla said: "Retaining Elon is more important than ever before. "We are confident that this award will incentivise Elon to remain at Tesla and focus his unmatched leadership abilities on further creating shareholder value for Tesla shareholders and attracting and retaining talent at Tesla." The company added that the vast pay package was justified by a "war for AI talent" that has seen "multi-billion-dollar acquisitions of companies and nine-figure cash compensation packages". A race to develop artificial intelligence (AI) has seen tech companies hand out huge deals to attract staff, led by Mark Zuckerberg's Meta which has reportedly offered packages worth as much as $1bn to individuals. Waning demand and fierce competition Tesla said the interim award was designed to gradually increase Mr Musk's voting power. It added: "To succeed, [Tesla] requires a leader who combines strategic foresight, adaptability, and relentless execution to outperform competition and inspire the team. "Elon has demonstrated these unmatched leadership abilities time and time again with his unparalleled track record of delivering shareholder value since he joined as a founding figure and spearheaded the transformation of our extraordinary company." The share award for Mr Musk comes as Tesla is grappling with waning demand for its cars amid fierce competition from cut-price Chinese rivals. Mr Musk's ill-fated time in Donald Trump's government has also damaged the company's brand and critics say the billionaire has lost focus. Mr Musk has pinned his hopes of a revival at Tesla on AI and robotics with plans to roll out driverless cars and robotaxis. Dan Ives, an analyst at Wedbush, said: "We believe this grant will now keep Musk as chief executive of Tesla at least until 2030 and removes an overhang on the stock. "Musk remains Tesla's big asset and this comp issue has been a constant concern of shareholders once the Delaware soap opera began." Shares in Tesla were up more than 2pc in pre-market trading. Mr Ives said it remained "critical" that Tesla's board finalised a long-term compensation strategy ahead of an upcoming shareholder meeting in November.

In Desperate Bid to Get Elon Musk to Stay, Tesla Awards Him $29 Billion

After many months of plummeting sales and disastrous earnings, Tesla has awarded its controversial CEO a whopping $29 billion worth of its shares in a bid to keep him at the helm of the carmaker. After a Delaware judge threw out his astronomical pay package last year, which was worth $56 billion at the time, shareholders are terrified that his incredibly damaging leadership could soon come to an end. While continuing to attempt to get the pay package reinstated, the board granted him a "good faith" effort in "96 million restricted shares of stock" -- worth just under $29 billion at the current share price -- as a "first step," according to a lengthy and gushing statement to shareholders by the company's board. "It is imperative to retain and motivate our extraordinary talent, beginning with Elon," the statement reads. "The war for AI talent is intensifying, with recent months including multi-billion-dollar acquisitions of companies and nine-figure cash compensation packages for non-founder, individual AI engineers." In other words, the board is seemingly worried that the richest man in the world isn't getting his fair share and could walk. "As you know, Elon has not received meaningful compensation for eight years since the 2012 CEO Performance Award was last earned in 2017," the statement reads. "Despite overwhelming support from you in 2018 and again in 2024, our legal efforts continue in the Delaware courts to reinstate the 2018 CEO Performance Award. " Musk's original pay package "continues to be in legal limbo despite two separate shareholder votes supporting it by large margins," the board wrote. "Furthermore, we have no clear timeline for resolution, as we are still waiting not only for a ruling." It's a baffling development, considering the current state the carmaker finds itself in. Sales continue to tank across the world, largely the result of Musk's own actions and his infamous embrace of far-right ideologies that have alienated vast swathes of former customers and fans. Even the company's eleventh-hour refresh of its Model Y SUV has done little to inject life into a greatly tarnished brand. The news comes after Musk conceded that his 13 percent ownership stake in the company leaves him vulnerable during the company's second-quarter earnings call, arguing that his "control over Tesla, Inc. should be enough to ensure that it goes in a good direction, but not so much control that I can't be thrown out if I go crazy." The mercurial CEO threatened after the Delaware judge threw out his pay package in January 2024 that he was "uncomfortable" with building AI products and robots with Tesla without having a "25 percent voting control" -- comments that were tantamount to "blackmail," according to critics. Since then, Musk's Tesla has started shifting gears, pouring its resources into the development of a robotaxi service and a humanoid robot. However, major growing pains could leave a return on investment well out of reach within the next months or even years. But that major pivot has shareholders and the company's board reinvigorated. The company's shares are up around six percent over the past month, following plenty of uncertainty as Musk's relationship with president Donald Trump exploded spectacularly. Case in point, shares jumped when trading resumed on Monday by three percent. The board's statement warned that Tesla is in a "critical inflection point," arguing that "energizing and focusing Elon on Tesla" is the top priority. The "interim award" is "structured to incrementally increase his voting rights upon grant" to incentivize the mercurial billionaire and keep him focused. Musk has repeatedly been accused of having been distracted during his stint overseeing the gutting of the federal government. Will a cushy payday be enough to appease the billionaire and convince him to keep his head down as Tesla navigates a crisis of his own making? Musk spent much of the weekend retweeting and responding to lewd, AI-generated images and videos of anime women, as well as racist conspiracy theories -- but hasn't commented on the board's "good faith" offer yet.

Tesla approves $29 bn in shares to Musk as court case rumbles on

Tesla announced an "interim" compensation award worth about $29 billion for Elon Musk on Monday, asserting the need to retain the controversial CEO at a moment of fierce competition for top talent. The electric vehicle maker said in a statement it will award a distribution of 96 million Tesla shares to Musk as it "intends to compensate its CEO for his future services commensurate with his contributions to our company and stockholders." The award comes as Tesla challenges a Delaware court ruling that struck down a 2018 package of about $55.8 billion. With that appeal dragging out, Monday's announcement marks an interim step while the company develops a "longer-term CEO compensation strategy," Tesla said in a letter to stockholders. "We have recommended this award as a first step, 'good faith' payment," said the letter. "Retaining Elon is more important than ever before." Tesla 'rough' patch The move comes amid a fierce battle for top engineering talent as companies like Google and Meta compete for leadership on artificial intelligence. The Tesla letter, signed by Tesla board members Robyn Denholm and Kathleen Wilson-Thompson, described Musk as a "magnet for hiring and retaining talent at Tesla," noting that Tesla is transitioning from its electric vehicle focus "to grow toward becoming a leader in AI, robotics and related services." Musk is viewed within the business world as a unique talent after his success with building Tesla and SpaceX into major global companies. But his stewardship at Tesla has come under scrutiny in the last year as car sales and profits have tumbled. This trend has been partly due to Musk's support for far-right political causes, but also is related to a sluggish rollout of new auto models after the polarizing Cybertruck sold poorly. In a July 23 Tesla earnings call, Musk warned of more potentially "rough" quarters ahead before the company's robotics and AI ventures pay off. On the call, Musk reiterated his concern about the current framework in which he holds about 13% of Tesla shares prior to Monday's award. "As I've mentioned before, I think my control over Tesla should be enough to ensure that it goes in a good direction, but not so much control that I can't be thrown out if I go crazy," Musk said. Tesla's statement did not explicitly mention Musk's foray into politics, which has sparked consumer boycotts and vandalism. But the letter by Denholm and Wilson-Thompson alluded to concerns that Musk's attention had drifted from the company, calling the interim package a step toward "keeping Elon's energies focused on Tesla." The massive pay package comes eight months after the judge in a Delaware court rejected Musk's even larger compensation at Tesla, denying an attempt to restore the pay deal through a stockholder vote. Musk would be required to forfeit the new compensation package should the appeals court rule in his favor and grant him the full 2018 compensation, which at the time was valued at $55.8 billion. The new payout is sure to fuel concerns about the compensation for Musk, already the world's richest man, and whether the Tesla board is placing a sufficient check on the company's chief executive. Tesla shares rose 2.4% Monday in early trading.

Elon Musk retains title as the highest-paid CEO in history with $26 billion pay package -- and the only thing he has to do is show up for two years

The Tesla board has reinstated CEO Elon Musk as the highest-paid in history with a staggering new $29 billion pay package. His new deal with the $970 billion electric-vehicle maker comes after a Delaware judge twice rescinded Musk's previous moonshot megagrant. Musk's pay has been held up in litigation for the past seven years. "It is imperative to retain and motivate our extraordinary talent, beginning with Elon," Tesla board chair Robyn Denholm and fellow director Kathleen Wilson-Thompson wrote in a letter to shareholders. "The war for AI talent is intensifying, with recent months including multi-billion-dollar acquisitions of companies and nine-figure cash compensation packages for non-founder, individual AI engineers." Even in that select group, "no one matches" Musk, the board members wrote. Thus, the nearly $30 billion award is essential to keeping Musk focused on Tesla -- and getting him to recruit new talent to keep the EV manufacturer competitive in AI, robotics, and robotaxis, according to the board. Unlike Musk's previous pay plan, which included significant shareholder value hurdles he had to overcome, all Musk has to do to collect the new award is remain with Tesla as CEO or in a senior executive role for the next two years. He also has to hold the stock until 2030, according to the terms of the award, which will boost his ownership stake from around 13% to 15%. Brian Dunn, a 40-year compensation practitioner and director of the Institute for Compensation Studies at Cornell University told Fortune Musk's new award resembles what some experts have referred to as "fog-the-mirror grants." "If you're around and have enough breath left in you to fog the mirror, you get them," said Dunn. "These don't have performance targets." Technically, the award will be made in restricted shares, but Musk has to pay $23.34 per share to own the stock -- the same strike price as his 2018 options. With Tesla's stock trading at more than $300 a share, the arrangement gives Musk about $280 per share of built-in value, which some comp experts have referred to as "discounted options." Larry Cunningham, director of the University of Delaware's Weinberg Center for Corporate Governance, said that regardless of how the award could be classified for accounting or tax purposes, there's a simple and accurate description for it. "A deep-in-the-money stock option grant, awarded solely for retention," Cunningham told Fortune in a statement. The new package creates what Farient Advisors' Eric Hoffmann described as a "floor-and-ceiling" arrangement tied directly to the outcome of the ongoing litigation in Delaware, which Tesla has appealed. If courts again wipe out his original 2018 award of 303 million stock options, Musk gets to keep the new 96 million shares, worth about $29 billion at the current stock price. But if any part of the original grant gets reinstated, the new award will shrink accordingly, said Hoffmann. "There's a clause that says 'no double dipping,'" he said. "But this 96 million share award could be used to make up any of the original grant if he loses in the course of the legal action." Hoffmann said the territory the Tesla board is treading is "unprecedented" in executive compensation. "There's no playbook for this," said Hoffmann, who analyzed the terms of the award. "They made the first grant, it got overturned by a judge, they made another grant, got it approved by shareholders and then that got held up." To level set, a shareholder challenge over Musk's 2018 pay package led to a landmark opinion in which Musk's pay was rescinded. The Tesla board then sent the pay plan back to shareholders in 2024 for a say-on-pay vote approval, and shareholders voted in favor of giving Musk the comp. Last December, the same judge -- Delaware Court Chancellor Kathaleen McCormick -- declined to reverse her previous decision, which Tesla has since appealed. In their letter to investors, the board wrote there's no telling when the court will rule again and described this award as a "first step, 'good faith' payment to Elon." However, Tesla's performance in 2025 is a far cry from 2018, when the board first awarded Musk his daring moonshot grant. He followed the award up by multiplying Tesla's value 12-fold. Its market cap surpassed $1 trillion in October 2021 and again in May 2025. But recently Tesla has struggled. Year-to-date, its share price is down more than 18% and Musk has been active politically, supporting President Donald Trump despite the affiliation turning off Tesla's climate-focused consumer base, particularly in California. And this time, the board has left little to chance. Tesla erected a significant legal barrier in May that makes a challenge to this award a lot more difficult to mete out. After McCormick's ruling, Tesla shareholders approved a move from being incorporated in Delaware to Texas. In May, Texas amended its business code and Tesla modified its bylaws accordingly a day later. The bylaw amendment created a new threshold so any shareholder who wants to challenge Musk's pay in court has to hold at least 3% of Tesla's stock. The value is worth more than $3 billion. "The central theme here is that Tesla has moved its jurisdiction of incorporation from Delaware to Texas and as a result the propriety of Tesla's actions and Musk's compensation will have to be judged under Texas law, which is more permissive," wrote Columbia law professor John Coffee in a statement to Fortune. "Tesla may get sued but the odds are more in its favor in Texas." Texas followed Tesla's move by undertaking a campaign to make it a business first state. At this point, it's unclear how Texas courts would approach a challenge. "It will be interesting to see whether a Texas court chooses to follow Delaware's analytical framework -- or instead declines to engage in similar judicial scrutiny," said Cunningham. "The outcome could influence how other companies weigh the relative merits of Delaware versus Texas as a corporate home." Tesla has a veritable army of engaged individual retail investors, and many support Musk and have voted in favor of his comp plan twice now, getting it over the line with more than majority support. However, some pension fund leaders who oversee retirees assets invested in Tesla stock have been less than thrilled about Musk's new award. "A $29 billion compensation package for any CEO, let alone one who has been largely absent from their daily responsibilities as sales and stock value continue to fall short of investor expectations, is obscene," said New York City Comptroller Brad Lander in a statement. Lander said Tesla's board is enriching Musk at investors' expense, "once again." "But in light of Elon Musk's inattention to the day to day needs of Tesla, and the company's worse than expected stock value, the package suggests a board out of step with their responsibilities to investors," Frerichs wrote in a statement. "With revenues falling short of expectations, the board should be less concerned with paying fealty to a greedy CEO than with long-term planning for the success of the company. Shareholders should demand better corporate governance." SOC Investment Group, which represented a group of investors with nearly 8 million shares invested in Tesla, told Fortune in a statement that today's announcement included a striking admission from the board. "Even an additional $24B in equity might not motivate Elon Musk to stay for two more years, let alone ensure that he devote sufficient time and attention to turn around the currently slumping sales," SOC wrote.

Tesla approves $29 bn in shares to Musk as court case rumbles on

Washington (AFP) - Tesla announced an "interim" compensation award worth about $29 billion for Elon Musk on Monday, asserting the need to retain the controversial CEO at a moment of fierce competition for top talent. The electric vehicle maker said in a statement it will award a distribution of 96 million Tesla shares to Musk as it "intends to compensate its CEO for his future services commensurate with his contributions to our company and shareholders." The award comes as Tesla challenges a Delaware court ruling that struck down a 2018 package of about $55.8 billion. With that appeal dragging out, Monday's announcement marks an interim step while the company develops a "longer-term CEO compensation strategy," Tesla said in a letter to shareholders. "We have recommended this award as a first step, 'good faith' payment," said the letter. "Retaining Elon is more important than ever before." Tesla 'rough' patch The move comes amid a fierce battle for top engineering talent as companies like Google and Meta compete for leadership on artificial intelligence. The Tesla letter, signed by Tesla board members Robyn Denholm and Kathleen Wilson-Thompson, described Musk as a "magnet for hiring and retaining talent at Tesla," noting that Tesla is transitioning from its electric vehicle focus "to grow towards becoming a leader in AI, robotics and related services." Musk is viewed within the business world as a unique talent after his success with building Tesla and SpaceX into major global companies. But his stewardship at Tesla has come under scrutiny in the last year as car sales and profits have tumbled. This trend has been partly due to Musk's support for far-right political causes, but also is related to a sluggish rollout of new auto models after the polarizing Cybertruck sold poorly. In a July 23 Tesla earnings call, Musk warned of more potentially "rough" quarters ahead before the company's robotics and AI ventures pay off. On the call, Musk reiterated his concern about the current framework in which he holds about 13 percent of Tesla shares prior to Monday's award. "As I've mentioned before, I think my control over Tesla should be enough to ensure that it goes in a good direction, but not so much control that I can't be thrown out if I go crazy," Musk said. Tesla's statement did not explicitly mention Musk's foray into politics, which has sparked consumer boycotts and vandalism. But the letter by Denholm and Wilson-Thompson alluded to concerns that Musk's attention had drifted from the company, calling the interim package a step towards "keeping Elon's energies focused on Tesla." The massive pay package comes eight months after the judge in a Delaware court rejected Musk's even larger compensation at Tesla, denying an attempt to restore the pay deal through a shareholder vote. Musk would be required to forfeit the new compensation package should the appeals court rule in his favor and grant him the full 2018 compensation, which at the time was valued at $55.8 billion. The new payout is sure to fuel concerns about the compensation for Musk, already the world's richest man, and whether the Tesla board is placing a sufficient check on the company's chief executive. Tesla shares rose 2.4 percent Monday in early trading.

Tesla grants Musk $29 billion in shares as he appeals prior compensation ruling

Tesla has granted CEO Elon Musk a new $29 billion share award after a court voided his previous $50 billion compensation package, citing unfairness to shareholders. The move aims to retain Musk's leadership role amid strategic shifts toward AI and robotics, declining sales and rising competition in the electric vehicle market. Tesla has granted 96 million new shares worth about $29 billion to CEO Elon Musk, a move aimed at keeping the billionaire entrepreneur at the helm as he fights a court ruling that voided his original pay deal for being unfair to shareholders. In 2024, a Delaware court voided Musk's 2018 compensation package, valued at over $50 billion, citing that the Tesla board's approval process was flawed and unfair to shareholders. Musk kicked off an appeal in March against the order, claiming a lower court judge made multiple legal errors in rescinding the record compensation. Earlier this year, Tesla said its board had formed a special committee to consider some compensation matters involving Musk, without disclosing details. Tesla is at a turning point as Musk, its largest shareholder with a 13% stake, shifts focus from a promised affordable EV platform to robotaxis and humanoid robots, positioning the company more as an AI and robotics firm than an automaker. The new award is designed to gradually boost Musk's voting power, something he and shareholders have consistently said was key to keeping him focused on Tesla's mission, the special committee said in the filing. Read moreTesla sales in Europe almost halve amid anger against Musk "While we recognize Elon's business ventures, interests and other potential demands on his time and attention are extensive and wide-ranging ... we are confident that this award will incentivize Elon to remain at Tesla," the committee said in a regulatory filing on Monday. It added that if the Delaware courts fully reinstate the 2018 CEO Performance Award, the new interim grant will either be forfeited or offset and there will be no "double dip," it added. The interim award shares vest only if Musk remains in a key executive role through 2027. They also come with a five-year holding period except to cover tax payments or the purchase price. Musk must pay Tesla $23.34 per share of restricted stock that vests, which is equal to the exercise price per share of the 2018 CEO Award, the company said in Monday's filing. Tesla shares rose more than 2% in premarket trading. Falling sales The stock has lost about a quarter of its value so far this year as the company grapples with a decline in sales wrought by its aging vehicle line-up, tough competition and Musk's political stances that have alienated some potential buyers. The challenges have been worsened by US government cuts in support for EVs, with Musk saying at a post-earnings call last month that the waning subsidies could lead to a "few rough quarters" for the company before a wave of revenue from self-driving software and services begins late next year. Data from research firm S&P Global Mobility shared exclusively with Reuters on Monday showed that Tesla's brand loyalty had plunged since Musk endorsed US President Donald Trump last summer. Read moreMusk accuses Trump of being named in Epstein files as public row worsens Tesla's aging lineup also faces stiffer competition from an array of EVs from legacy automakers, including General Motors, Hyundai and BMW. Cybertruck, the only new model Tesla has released since 2020, has proved to be a flop despite Musk's prediction of hundreds of thousands of annual sales.

Tesla Approves Share Award Worth $29 Billion to CEO Elon Musk

(Reuters) -Tesla has granted CEO Elon Musk 96 million shares worth about $29 billion, a move aimed at keeping the billionaire entrepreneur at the helm as he fights a court ruling that voided his original pay deal for being unfair to shareholders. In 2024, a Delaware court voided Musk's 2018 compensation package, valued at over $50 billion, citing that the Tesla board's approval process was flawed and unfair to shareholders. Musk kicked off an appeal in March against the order, claiming a lower court judge made multiple legal errors in rescinding the record compensation. Earlier this year, the EV maker said the board had formed a special committee to consider some compensation matters involving Musk, without disclosing any details. Tesla is at a turning point as Musk, its largest shareholder with a 13% stake, shifts focus from a promised affordable EV platform to robotaxis and humanoid robots, positioning the company more as an AI and robotics firm than an automaker. "While we recognize Elon's business ventures, interests and other potential demands on his time and attention are extensive and wide-ranging ... we are confident that this award will incentivize Elon to remain at Tesla," the special committee said in the filing. The award is designed to gradually boost Musk's voting power, something he and shareholders have consistently said was key to keeping him focused on Tesla's mission, it added. Musk must pay Tesla $23.34 per share of restricted stock that vests, which is equal to the exercise price per share of the 2018 CEO Award, it said in the filing. Tesla shares rose more than 2% in premarket trading. (Reporting by Aditya Soni in Bengaluru; Editing by Anil D'Silva)

Tesla approves share award worth $29 billion to CEO Elon Musk - The Economic Times

Tesla has granted CEO Elon Musk 96 million shares worth about $29 billion. Tesla is at a turning point as Musk, its largest shareholder with a 13% stake, shifts focus from a promised affordable EV platform to robotaxis and humanoid robots, positioning the company more as an AI and robotics firm than an automaker.Tesla has granted CEO Elon Musk 96 million shares worth about $29 billion, a move aimed at keeping the billionaire entrepreneur at the helm as he fights a court ruling that voided his original pay deal for being unfair to shareholders. In 2024, a Delaware court voided Musk's 2018 compensation package, valued at over $50 billion, citing that the Tesla board's approval process was flawed and unfair to shareholders. Musk kicked off an appeal in March against the order, claiming a lower court judge made multiple legal errors in rescinding the record compensation. Earlier this year, the EV maker said the board had formed a special committee to consider some compensation matters involving Musk, without disclosing any details. Tesla is at a turning point as Musk, its largest shareholder with a 13% stake, shifts focus from a promised affordable EV platform to robotaxis and humanoid robots, positioning the company more as an AI and robotics firm than an automaker. "While we recognize Elon's business ventures, interests and other potential demands on his time and attention are extensive and wide-ranging ... we are confident that this award will incentivize Elon to remain at Tesla," the special committee said in the filing. The award is designed to gradually boost Musk's voting power, something he and shareholders have consistently said was key to keeping him focused on Tesla's mission, it added. Musk must pay Tesla $23.34 per share of restricted stock that vests, which is equal to the exercise price per share of the 2018 CEO Award, it said in the filing. Tesla shares rose more than 2% in premarket trading.

Tesla Approves $29 Billion Payday For CEO Elon Musk

Aug 4 (Reuters) - Tesla has granted CEO Elon Musk shares worth about $29 billion in a new pay deal aimed at keeping the billionaire entrepreneur at the helm during a crucial pivot from its struggling core auto business to robotaxis and humanoid robots. The company described the "interim award" of the 96 million new shares as a first step, "good faith" payment to honor Musk's more than $50 billion pay package from 2018 that was struck down by a Delaware court last year. Musk can claim the new award if he remains in a top executive role for another two years and a court does not reinstate the 2018 package currently on appeal. He has to hold the shares for five years and can buy them for $23.34 per share, the same as the exercise price of the 2018 award. Tesla will also put to vote a longer-term CEO compensation plan at its annual investor meeting on November 6. The move is meant to keep Musk, the public face of Tesla and architect of its robotaxi strategy, focused on the electric-vehicle maker as it navigates a shift to cybercabs and robotics from its mainstay auto business. It also seems to quell any speculation that the board's patience with Musk could be wearing thin because of the recent tumultuous months, including the CEO's foray into politics. The move to give Musk greater control of the company suggests that directors still see him as best-suited to tackle Tesla's growing list of challenges in the years ahead. Sales have been falling at the company due to its aging vehicle line-up, tough competition and Musk's right-wing political stances that have tarnished its brand. S&P Global Mobility data shared exclusively with Reuters showed on Monday that Tesla's brand loyalty had plunged since Musk endorsed U.S. President Donald Trump last summer. Musk's involvement in politics and his wider business empire, including AI startup xAI, have also sparked concerns about his devotion to Tesla, the main source of his wealth. Musk has threatened to leave unless he gets more control over Tesla. The new stock award will take his Tesla stake, already the largest, to more than 15% from the 12.7% currently, according to Reuters calculations based on data compiled by LSEG. Before Monday's grant, Musk had no active compensation plan and Tesla said he had not received meaningful pay since 2017. With the legal fight over his 2018 package expected to continue, the board said it moved to retain Musk's "extraordinary talent." "While we recognize Elon's business ventures, interests and other potential demands on his time and attention are extensive and wide-ranging... we are confident this award will incentivize Elon to remain at Tesla," said a special committee Tesla formed this year to consider Musk's compensation. It consists of chair Robyn Denholm and independent director Kathleen Wilson-Thompson. The company said it would not record compensation expense for the award as it does not currently expect the performance condition to be "probable of being met." It will re-evaluate and recognize the expense if it determines the award is likely to be met, including after the two-year vesting period. The new shares will also be forfeited or offset if the Delaware courts fully reinstate the 2018 stock award, ensuring there is no "double dip," the special committee said. Investors and analysts welcomed the news, with Tesla shares rising nearly 2% in early trading. The stock has lost a quarter of its value this year, as of last close. "Under normal circumstances, a compensation package in the billions would raise some eyebrows. (But) clearly investors have benefited from Musk's stewardship of Tesla," said Camelthorn Investments adviser Shawn Campbell, who owns Tesla shares. "This stock grant will bind Musk to Tesla for the next two years." The Delaware ruling on Musk's 2018 pay package, the largest in Corporate America, had cited flaws in the board's approval process and unfairness to investors. Musk kicked off an appeal against the order in March, claiming a lower court judge made multiple legal errors in rescinding the record compensation. He has argued that the package resulted in spectacular growth for Tesla and yet was determined by the lower Court of Chancery to be unfair to shareholders, who voted twice to approve the plan. Tesla shares have risen nearly 2,000% over the past decade, far outperforming the around 200% rise in the benchmark S&P 500 index in the same period. "This is simply a repackaged version of what was done years ago and was ruled improper by a judge. It renders the Delaware court decision effectively meaningless," said Charles Elson, founding director of the Weinberg Center for Corporate Governance at the University of Delaware. "You don't have to incentivize him to stay. If he leaves, he throws away 13% of the company, which is still a huge part of his net worth, said Elson, who had filed amicus briefs supporting the court's decision to void Musk's 2018 award. (Reporting by Aditya Soni in Bengaluru, additional reporting by Zaheer Kachwala, Jaspreet Singh and Akash Sriram; Editing by Anil D'Silva)

Tesla approves share award worth $29 billion to CEO Elon Musk

Tesla has granted CEO Elon Musk 96 million shares worth about $29 billion. Tesla is at a turning point as Musk, its largest shareholder with a 13% stake, shifts focus from a promised affordable EV platform to robotaxis and humanoid robots, positioning the company more as an AI and robotics firm than an automaker. Tesla has granted CEO Elon Musk shares worth about $29 billion, in a new pay deal aimed at keeping the billionaire entrepreneur at the helm during a crucial pivot from its struggling core auto business to robotaxis and humanoid robots. The company described the grant of the 96 million new shares as a first step, "good faith" payment to honor Musk's more than $50 billion pay package from 2018 that was struck down by a Delaware court last year. A longer-term CEO compensation plan will be put to a vote at its annual investor meeting on November 6. The Delaware ruling had cited flaws in the board's approval process and unfairness to investors. Musk kicked off an appeal against the order in March, claiming a lower court judge made multiple legal errors in rescinding the record compensation. The world's most valuable automaker is at a turning point, with Musk, its largest shareholder with a 13% stake, positioning it more as an AI and robotics company amid falling sales in its mainstay auto business and a slump in its share price. The share award is designed to gradually boost Musk's voting power, something he and shareholders have consistently insisted was key to keeping him focused on Tesla's mission, said a special committee Tesla formed earlier this year to consider Musk's compensation. It consists of chair Robyn Denholm and independent director Kathleen Wilson-Thompson. "While we recognize Elon's business ventures, interests and other potential demands on his time and attention are extensive and wide-ranging... we are confident this award will incentivize Elon to remain at Tesla," the committee said in Monday's filing. The new shares vest only if Musk remains in a key executive role through 2027. They also have a five-year holding period, except to cover tax payments or the purchase price of $23.34 per share, which is equal to the exercise price of the 2018 award. If the Delaware courts fully reinstate the 2018 CEO Performance Award, the new interim grant will either be forfeited or offset and there will be no "double dip," according to the filing with the Securities and Exchange Commission. "This is simply a repackaged version of what was done years ago and was ruled improper by a judge," said Charles Elson, founding director of the Weinberg Center for Corporate Governance at the University of Delaware. "It renders the Delaware court decision effectively meaningless," said Elson, who had filed amicus briefs supporting the Delaware Court's decision to void Musk's 2018 award. Auto business struggles Gary Black, a longtime Tesla investor who sold his position recently, said on X the award should be viewed "very favorably" for the company as it aligns Musk's incentives with the shareholders and removes uncertainty about him leaving. Tesla shares rose more than 2% in premarket trading. They have gained almost 2,000% in the past decade, far outperforming the around 200% increase in the benchmark S&P 500 index. But the stock has come under pressure this year, losing about a quarter of its value as Tesla grapples with a sales decline wrought by its aging vehicle line-up, tough competition and Musk's political stances that have alienated some buyers. The challenges have been worsened by U.S. government cuts in support for EVs. Musk said at a post-earnings call last month the waning subsidies could lead to a "few rough quarters" before a wave of revenue from self-driving software and services begins late next year. Analysts expect Tesla to post another annual sales decline in 2025 after its first one last year. S&P Global Mobility data shared exclusively with Reuters showed on Monday that Tesla's brand loyalty had plunged since Musk endorsed US President Donald Trump last summer. The world's most powerful person and its richest had a falling out earlier this year. And Musk has raised fears about whether he will be able to devote enough time and attention to Tesla after he locked horns with Trump by forming a new political party. The company also faces a long regulatory road to its robotaxi bet. It started a small trial of its robotaxis in Austin, Texas, June with about a dozen Model Y SUVs. But it lacks permits to offer the service in California, where it last week launched a ride-hailing service in the San Francisco Bay Area without indicating whether it would be using self-driving vehicles that power its Austin operations.

Tesla Board Grants Elon Musk New $29 Billion Compensation Package Amid Ongoing Legal Battles and Shareholder Support

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy. After being forced to work at Tesla without any meaningful compensation, which was the aberrant result of an adverse court ruling, Elon Musk has now received a sizable interim compensation award. For the benefit of those who might not be aware, in January 2024, a Delaware judge voided Elon Musk's $56 billion compensation package from 2018, citing a flawed approval process and excessive influence by Musk over Tesla's board. The ruling also voided Elon Musk's 304 million unexercised stock options, which would have entitled him to around 9 percent of Tesla's 3.2 billion outstanding common shares. Bear in mind the CEO of Tesla currently retains a 13 percent stake in his company. In June 2024, Tesla shareholders voted to reapprove the 2018 compensation package for Elon Musk, with 77 percent of the total votes polled in favor, aiming to bolster Musk's leadership amid the company's expansion into AI and robotics. The CEO of Tesla had openly demanded a 25 percent voting control over Tesla after the Delaware court ruling, to prevent being "overturned" on occassion. As part of its relocation of state of incorporation to Texas, Tesla had agreed to retain legal jurisdiction over the issue of Elon Musk's compensation within Delaware and the court of its Chancery Chief Judge, Kathaleen St. J. McCormick. However, in December 2024, the judge again upheld her initial ruling, stating that the shareholder vote did not rectify the procedural issues. Specifically, the court argued that Tesla and Elon Musk had opted for a re-ratification of the 2018 compensation plan under the section 204 of the Delaware General Corporation Law, which allowed for rectifying corporate acts that were defective due to a "failure of authorization." Critically, the code did not provide for curing breaches of fiduciary duty, which was the entire raison d'être cited by the court for nullifying Musk's 2018 pay package. This brings us to today when Tesla's board has just approved a new compensation plan for Elon Musk, granting him 96 million shares valued at approximately $29 billion, with an exercise price of $23.34 per share, aligning with the 2018 award's terms. The new award is structured to gradually increase Musk's voting power, reinforcing his commitment to Tesla's evolving vision. However, do note that Tesla does not currently think that the performance conditions of this new interim plan will be met anytime soon:

Elon Musk gets $29B pay package from Tesla board to keep him at EV...

Elon Musk was awarded a new $29 billion pay package by Tesla's board on Monday that vests in two years -- a vital move to keep the mogul at the helm during a crucial pivot from its struggling core auto business to robotaxis and humanoid robots. The deal, announced in an SEC filing, grants Musk 96 million new shares in Tesla, which has been in a prolonged sales slump that has hurt the company's stock performance this year. Shares rose more than 2% in premarket trading. "While we recognize Elon's business ventures, interests and other potential demands on his time and attention are extensive and wide-ranging ... we are confident that this award will incentivize Elon to remain at Tesla," members of a special committee formed to consider Musk's pay said in the filing. Last year, a Delaware judge nixed Musk's original stock-based compensation package, which was worth more than $50 billion, after finding it was too excessive and unfair to shareholders. Musk was so incensed by the decision that he moved Tesla's state of incorporation from Delaware to Texas. Musk, who is already the world's richest person with a real-time net worth of $398 billion according to Bloomberg, filed an appeal in March challenging the Delaware judge's ruling. Tesla's special committee said there would be no "double dip" if the original deal is eventually restored. Instead, the $29 billion package will either be voided or offset. The special committee consists of just two members - Tesla chair Robyn Denholm and board director Kathleen Wilson-Thompson. Musk is already Tesla's largest individual shareholder and owns roughly 13% of the company. The announcement removed a key "overhang" on Tesla's shares and should help calm investors with questions about Musk's commitment, according to Wedbush analyst Dan Ives. Musk remains Tesla's big asset and this comp issue has been a constant concern of shareholders once the Delaware soap opera began," Ives wrote in a note to clients. Ives added that it is critical for Tesla's board to "get this long-term compensation strategy in place prior to the company's November 6th shareholder meeting which would address the elephant in the room." According to the deal's terms, Musk's new shares will only vest if he remains a key executive at Tesla through at least 2027. The shares also come with a five-year lockup, with Musk only able to sell to cover tax payments. Critics have long alleged that Musk is overpaid compared to other Big Tech CEOs, such as Microsoft's Satya Nadella and Google's Sundar Pichai, who have led their companies to share price growth without monster pay packages. Just a few executives have secured deals worth $1 billion or more annually in recent years, according to the Wall Street Journal. That includes Palantir boss Alexander Karp, who earned more than $6 billion last year, and Hock Tan of chip maker Broadcom, who earned $1.15 billion. Musk will need to redouble efforts to lead a turnaround at Tesla. Analysts have pointed to Tesla's aging car lineup and increased competition from Chinese automakers like BYD as key obstacles for the company. Musk's political adventures, including his work with the Department of Government Efficiency and public clashes with President Trump, have also worried stockholders. The Tesla CEO has cited AI initiatives, such as Tesla's self-driving Robotaxis and Optimus humanoid robots, as central to its long-term business strategy.

Tesla approves share award worth $29 billion to CEO Elon Musk

(Reuters) -Tesla has granted 96 million new shares worth about $29 billion to CEO Elon Musk, a move aimed at keeping the billionaire entrepreneur at the helm as he fights a court ruling that voided his original pay deal for being unfair to shareholders. In 2024, a Delaware court voided Musk's 2018 compensation package, valued at over $50 billion, citing that the Tesla board's approval process was flawed and unfair to shareholders. Musk kicked off an appeal in March against the order, claiming a lower court judge made multiple legal errors in rescinding the record compensation. Earlier this year, Tesla said its board had formed a special committee to consider some compensation matters involving Musk, without disclosing details. Tesla is at a turning point as Musk, its largest shareholder with a 13% stake, shifts focus from a promised affordable EV platform to robotaxis and humanoid robots, positioning the company more as an AI and robotics firm than an automaker. The new award is designed to gradually boost Musk's voting power, something he and shareholders have consistently said was key to keeping him focused on Tesla's mission, the special committee said in the filing. "While we recognize Elon's business ventures, interests and other potential demands on his time and attention are extensive and wide-ranging ... we are confident that this award will incentivize Elon to remain at Tesla," the committee said in a regulatory filing on Monday. It added that if the Delaware courts fully reinstate the 2018 CEO Performance Award, the new interim grant will either be forfeited or offset and there will be no "double dip," it added. The interim award shares vest only if Musk remains in a key executive role through 2027. They also come with a five-year holding period except to cover tax payments or the purchase price. Musk must pay Tesla $23.34 per share of restricted stock that vests, which is equal to the exercise price per share of the 2018 CEO Award, the company said in Monday's filing. Tesla shares rose more than 2% in premarket trading. FALLING SALES The stock has lost about a quarter of its value so far this year as the company grapples with a decline in sales wrought by its aging vehicle line-up, tough competition and Musk's political stances that have alienated some potential buyers. The challenges have been worsened by U.S. government cuts in support for EVs, with Musk saying at a post-earnings call last month that the waning subsidies could lead to a "few rough quarters" for the company before a wave of revenue from self-driving software and services begins late next year. Data from research firm S&P Global Mobility shared exclusively with Reuters on Monday showed that Tesla's brand loyalty had plunged since Musk endorsed U.S. President Donald Trump last summer. Tesla's aging lineup also faces stiffer competition from an array of EVs from legacy automakers, including General Motors, Hyundai and BMW. Cybertruck, the only new model Tesla has released since 2020, has proved to be a flop despite Musk's prediction of hundreds of thousands of annual sales. (Reporting by Aditya Soni in Bengaluru; Editing by Anil D'Silva)

Tesla awards Elon Musk $29bn in stock to 'retain' CEO amid rising competition

New York, US, Aug 4 (EFE).- Tesla announced Monday it has granted CEO Elon Musk stock options worth around $29 billion, aiming to "retain" the billionaire executive after a US court invalidated his previous compensation package. In 2024, a Delaware court struck down Musk's 2018 pay deal, valued at over $50 billion, citing a flawed approval process by Tesla's board that it deemed unfair to shareholders. "To recognize what Elon has accomplished and the extraordinary value he delivered to Tesla and our shareholders, we believe we must take action to honor the bargain that was struck in 2018," Tesla said in a statement. The company described the new award as a "good faith" first step in compensating Musk for both past and future contributions. The package includes 96 million shares, which Musk can access after two years of continued service in a senior executive role. Tesla emphasized that the company is "at a critical inflection point" and that retaining Musk is "more important than ever before." It said that, through Musk's "unique vision and leadership," Tesla is transitioning from its role as a leader in electric vehicles and renewable energy into a frontrunner in AI, robotics, and related technologies. "To succeed, it requires a leader who combines strategic foresight, adaptability, and relentless execution to outperform competition and inspire the team. Elon has demonstrated these unmatched leadership abilities time and time again." However, Musk will forfeit the new stock grant if Tesla successfully reinstates the original $50 billion package through its ongoing legal appeal. Tesla shares, down nearly 20% so far this year, rose more than 2.3% in pre-market trading Monday. The company's vehicle sales have declined amid growing competition, an aging product lineup, and criticism of Musk's political involvement in the Trump administration. EFE