Tesla grants Musk $29 billion stock deal amid strategic shift
The award involves 96 million new shares and serves as partial remuneration following the invalidation of his previous $50 billion pay package by a Delaware court.
Tesla has awarded CEO Elon Musk a substantial new compensation package worth approximately $29 billion in stock options, signalling the company’s continued reliance on Musk’s leadership at a critical juncture.
This interim payment includes 96 million new Tesla shares and aims to incentivise Musk as Tesla transitions from a struggling auto business toward futuristic ventures like robotaxis and humanoid robots.
The decision follows a Delaware court ruling last year invalidating Musk’s 2018 pay package, valued at over $50 billion, due to procedural and fairness concerns.
Under the new arrangement, Musk must remain Tesla’s chief executive for at least two more years to fully secure the shares, which he can acquire at the original 2018 price of $23.34 per share, considerably below Tesla’s current market valuation.
He must hold these shares for five years, aligning his financial interests closely with the company’s performance.
Tesla’s board will also propose a long-term CEO compensation plan for shareholder approval in November, underscoring its commitment to retaining Musk despite recent controversies and challenges.
The announcement comes amid investor concerns over Tesla’s declining sales, intensified competition, and damage to brand perception linked to Musk’s vocal political endorsements, notably his public support of former US President Donald Trump.
Data from S&P Global Mobility indicates a notable drop in customer brand loyalty since Musk’s political declarations last year.
Nevertheless, the board remains convinced that Musk’s leadership is critical, describing the stock award as essential for securing his ongoing commitment amid his expanding business interests.
Market reactions to Musk’s compensation package have generally been positive, with Tesla’s shares gaining almost 2% following the announcement.
Source: The Guardian
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