The Tesla Board announced a new compensation package for Director General Elon Musk with about $ 29 billion shares, with the company citing the “always intensifying AI talented war and Tesla’s position at a critical inflection point” as reasons for the payment.
The massive pay package is assigned by 2019 -equivalent motivation plan that is already approved by shareholders, so it won’t go to vote, according to Regulatory archiving and Ann LiptonProfessor at the University of Colorado Law School. Tesla says it will put a “longer -term compensation strategy” to a vote at the company’s annual meeting of shareholders, which is scheduled for November.
Musk’s new compensation plan will be completely canceled if the Delaware Supreme Court decides to overthrow a judge January 2024 decision To hit Musk’s 2018 compensation package for how it was negotiated behind the scenes. That wage package was worth around $ 56 billion.
Musk threatened to stop working on AI and Robotics at Tesla Unless he gets more control over the company. Those threats preceded what is now a multi -million dollar talented war between the Major companies in the artificial smart spacealong with speed of mergers and acquisitions.
At the same time, Musk built its own company AI outside Tesla called Xai, which now owns X, its social media platform. This happened during Tesla Sales growth is gone And its brand was damaged by Musk’s involvement in the Trump administration.
Tesla said On Monday, its board formed a special committee earlier this year consisting of President Robyn Denholm and board member Kathleen Wilson-Thompson to order a new package.
The prize they finally decided involves giving Musk 96 million shares that will dress in two years, provided he “serves continuously in a senior leadership role at Tesla” during that term and holds the share for five years. Unlike Tesla’s previous prize to Musk, this new package does not seem to be linked to goals how to increase the company’s share price.
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At Tesla’s pre-market trading price, it would be worth around $ 29 billion. Musk will have to pay a $ 23.34-per-stock purchase price, bringing the total current value of the prize to him to about $ 26.7 billion. Depending on how the Delaware Supreme Court rules over Tesla’s appeal, the package can be removed, so “can be” double soaking “, according to Tesla.
“Elon will not be able to keep this new prize in addition to the options he will be awarded under the 2018 Efficiency Prize, if the courts rule in favor of us,” the company wrote.
Tesla said that Musk and his brother Kimbal, who is also a board member, apologized from the process of building this new compensation package. Musk’s involvement in the 2018 compensation package was one of the reasons why Delaware Chance -Judge Chancellor Kathaleen McCormick decided to hit it after a process created by stock process.
McCormick said the process of creating that 2018 plan was “deeply damaged” due to Musk’s input and his deep relationships to the people on Tesla’s board. She also criticized this plan for not including any terms that would link Musk to Tesla for a “any defined time”-a probable reason for the two-year promise included in the new plan.
McCormick’s decision led to a disturbance among Tesla’s greatest fans and many of its shareholders. It is also what inspired the Re-Incorporate company from Delaware to Texas, a state with less established equity protections written in its laws. Tesla went until holding a shareholder to vote to “re-claim” the pay package. But McCormick confirmed her decision in December 2024saying that Tesla’s vote and legal arguments were “unprecedented theories [that] Go against multiple stresses of fixed law. ”
Update: This story and the headline have been updated to reflect that the award has been approved by the Tesla Board and does not need a shareholders vote.
