Electric car maker Tesla has approved awarding CEO Elon Musk 96 million shares, in a bid to keep the billionaire at the helm of the company.
Tesla has approved a $29 billion stock award package for CEO Elon Musk. Photo: Reuters .
The $29 billion stock award comes as billionaire Elon Musk appeals a court ruling that revoked his initial compensation package from the world’s largest electric carmaker, according to Reuters.
In 2024, a court in Delaware (USA) canceled Musk’s 2018 compensation package – which was valued at more than 50 billion USD .
The reason given was related to Tesla’s Board of Directors’ approval process being flawed and causing damage to the company’s shareholders.
However, in March, the richest man on the planet filed an appeal, claiming that the judge had made many legal mistakes in canceling this record compensation package.
Earlier this year, Tesla announced that its board of directors had formed a special committee to review certain issues related to the CEO’s compensation, but did not provide further details.
Tesla is at a turning point as CEO Elon Musk, who is also the company’s largest shareholder with a 13% ownership stake, shifts focus from its low-cost electric vehicle platform to areas like robotaxis and humanoid robots, shaping Tesla more as an artificial intelligence and robotics company than an automaker.
“We understand that Elon’s businesses, interests, and other commitments are diverse. But we believe this compensation package will provide an incentive for Elon to continue his involvement with Tesla,” the Tesla Board Special Committee said.
The stock package is designed to gradually increase Musk’s voting power, something he and shareholders have long seen as key to keeping him focused on Tesla’s mission.
According to the filing, Elon Musk will pay Tesla $23.34 per share in the award, which is equal to the exercise price per share of his 2018 compensation package, and the shares will be restricted. Tesla shares rose more than 2% in premarket trading following the news.
In fact, billionaire Elon Musk does not receive a salary or cash bonuses from Tesla, but makes money mainly through “lucrative” stock options packages, allowing the CEO to buy Tesla shares at a much cheaper price than the market price. Currently, the US electric car maker’s shares are trading on the market at over $302 / share, equivalent to the capitalization of this company reaching $948.3 billion . This price has decreased by more than 20% compared to the beginning of this year.
“Control of the company should belong to shareholders, not the court,” Tesla CEO wrote on social network X after the previous court ruling.
Meanwhile, Tesla also announced that it would appeal, calling the ruling “erroneous” and pointing out that the result went against the decision of the majority of the company’s shareholders.
