Tesla awards CEO Elon Musk 96 million shares worth $29 billion following a court ruling that voided his original $50 billion compensation deal.
Tesla’s $29 Billion Share Award to Elon Musk
In a strategic move to keep Elon Musk at the helm, Tesla has granted the CEO 96 million shares valued at approximately $29 billion. This decision follows a 2024 Delaware court ruling that voided Musk’s original 2018 compensation package, valued at over $50 billion, due to an unfair approval process.
Background: Court Voids Musk’s 2018 Pay Deal
- In 2024, a Delaware court declared Musk’s 2018 compensation deal invalid.
- The court cited that Tesla’s board approval process was flawed and unfair to shareholders.
- Musk has appealed this ruling, arguing that the judge made several legal errors.
Tesla’s Special Committee and Strategic Intent
- Tesla’s board formed a special committee to evaluate compensation matters related to Musk.
- The committee stated the new share award is intended to incentivize Musk to remain committed to Tesla.
- The award aims to increase Musk’s voting power gradually, ensuring his focus on Tesla’s mission.
Shift in Tesla’s Business Focus
- Musk is Tesla’s largest shareholder, holding a 13% stake in the company.
- Tesla is pivoting from affordable electric vehicles toward robotaxis and humanoid robots, emphasizing AI and robotics over traditional auto manufacturing.
Financial Details of the Share Award
- Musk must pay Tesla $23.34 per share of restricted stock that vests, matching the 2018 CEO Award exercise price.
- Tesla’s shares rose over 2% in premarket trading following the announcement.
What This Means for Tesla and Elon Musk
This significant share award reflects Tesla’s commitment to retaining Musk amid ongoing legal challenges and a strategic business transformation. The move reassures investors and underscores Musk’s pivotal role in Tesla’s future growth.
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