Tesla CEO Elon Musk was given a $29 billion compensation package by the Tesla board of directors. File Photo by Francis Chung/UPI | License Photo
Tesla’s board is giving its CEO Elon Musk a $29 billion pay package, months after a Delaware court rejected for a second time his 2018 performance award.
The new package is a “good faith” award designed to keep Musk at the helm of the company. It would give Musk 96 million shares of the company that he could take after two years of service in a “senior leadership role” at Tesla. Musk hinted last month that he wanted more ownership at Tesla beyond his 13% stake to prevent his ouster by “activist” shareholders.
In January, Chancery Court Chancellor Kathleen McCormick ruled in favor of shareholder-plaintiff Richard Tornetta, finding the board, under Musk’s influence, had arrived at an “unfair price” for the package and ordered the world’s richest man to return what he had already received from it.
Each of the 96 million shares received in the deal trades at just over $300. Musk would have to pay $23.34 for each of those shares, equal to the amount he was expected to pay when he was first awarded his 2018 compensation package.
“Despite these legal challenges, we can all agree that Elon has delivered the transformative and unprecedented growth that was required to earn all milestones of the 2018 CEO Performance Award,” said Robyn Denholm and Kathleen Wilson-Thompson, members of the Special Committee of the Board of Directors on X. This growth has translated into immense value generated for Tesla and all our shareholders.”
Musk doesn’t get a salary from Tesla. He makes his money through stock packages.
Musk is also appealing the Delaware court order.
Musk’s foray into politics and government has drawn the anger of political opponents and Tesla shareholders. Political opponents have protested at Tesla dealerships, and shares of Tesla have fallen 25% this year.
Musk has said that he will return to his companies full time.
“We would also like to stress that prior to recommending this award, we reviewed your letters, read your X posts, and considered the direct feedback we have received from many of you in order to align our recommendation with your expressed views,” Denholm and Wilson-Thompson said in the X post. “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, although it is limited by the capacity of our current equity incentive plan. As such, we are also working on next steps to address that issue.”
