Tesla granted CEO Elon Musk shares worth $US29 billion ($A45billion), a move designed to keep the billionaire entrepreneur in the lead as he battles a court decision that voided the original pay deal because it was unfair to shareholders.
A Delaware court voided Musk’s 2018 compensation package valued at more than $US50 billion in 2024. The court cited that the Tesla Board’s approval process had been flawed and unfair to investors. Musk filed an appeal against the order in March, claiming that a lower court judge committed multiple legal errors by rescinding this record compensation.
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Earlier in the year, the EV manufacturer said that the board had created a special committee for the purpose of examining some compensation matters involving Musk. However, no details were disclosed.
Tesla has reached a turning point, as Musk, the company’s largest shareholder, with a 13% stake, shifts its focus from a promised, affordable EV platform, to robotaxis, and humanoid robotics, positioning it more as an AI, robotics, and 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,” the special committee said in the filing. Credit: AAP
The special committee said that the award was designed to gradually increase Musk’s voting rights, which he and Tesla shareholders have repeatedly stated is important to keep him focused on Tesla’s mission. The filing stated that Musk must pay Tesla $US23.34 for each share of restricted stock which vests. This is equal to exercise price per share for the 2018 CEO Award. Tesla’s stock is down about a quarter in value this year due to the company’s aging vehicle lineup, stiff competition and Musk’s political views that have alienated many potential buyers.
The problems have been exacerbated by the US government’s cuts to support for EVs. Musk said at a recent post-earnings conference call that the waning subsidies may lead to a few “rough quarters” before a new wave of revenue comes from self-driving services and software.
