Tesla has announced that it will begin the process to compensate CEO Elon Musk with a new pay package worth around $29 billion. In a statement, the company highlighted that Musk hasn’t received “meaningful compensation in eight years” since 2017. The company believes that retaining Musk as CEO is “more important than ever before” as Tesla is at “a critical inflection point that has the potential to create continued extraordinary value” for shareholders.
Details of the Compensation Package
- The new pay package includes over 96 million Tesla shares, each trading at just over $300, after anti-trust approval.
- The shares have a holding period of five years unless Musk has to “cover tax payments or the purchase price.”
- If the Delaware court reinstates Musk’s $56 billion pay package, he must forfeit the current compensation, as “there cannot be any ‘double dip’”.
Background
The announcement follows Musk expressing fears of losing control over Tesla amid dwindling sales. The company’s sales figures have declined in multiple markets throughout the world, including Denmark, Sweden, and France. A Delaware court had previously overruled Musk’s $56 billion pay package, which was approved by the members of Tesla’s Board.
What’s Next
Tesla’s board is set to hold its annual shareholder meeting in November, with Musk’s pay package expected to be a key point of discussion. The company’s performance and future plans will be closely watched by investors and analysts. With the new compensation package, Tesla aims to retain Musk’s leadership and expertise, which is deemed crucial for the company’s continued success.
Key Points
- Tesla begins process to award Elon Musk with $29 billion CEO compensation package
- Retaining Musk as CEO deemed ‘crucial’ amid uncertainty over previous $56 billion pay package
- New pay package includes over 96 million Tesla shares with a holding period of five years
- Musk’s pay package to be discussed at Tesla’s annual shareholder meeting in November
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