Tesla Grants Musk Massive Pay Deal To Keep CEO On Board Amid Legal Battle

Tesla on Monday approved a new compensation package worth $29 billion for Elon Musk, aimed at securing his leadership as the company shifts its focus away from its underperforming electric car division and toward developing robotaxis and humanoid robots.

The automaker called the grant of 96 million additional shares an “interim award,” presenting it as a “good faith” gesture to acknowledge the now-invalidated $50 billion pay plan from 2018 that a Delaware judge struck down last year.

According to the terms of the new agreement, Musk can access the shares if he stays on as a top executive for another two years and if the court does not reverse its decision on the 2018 deal, which is currently under appeal.

Musk is also required to hold on to the shares for a five-year period and may purchase them at $23.34 each, identical to the strike price from the original 2018 package.

Tesla is preparing to unveil a more comprehensive compensation arrangement for Musk at its upcoming shareholder meeting scheduled for November 6.

This plan is designed to keep Musk, who is closely associated with Tesla’s brand and vision, especially in its autonomous driving and robotics projects, fully committed to the company during a major shift in direction.

The decision also arrives amid reports that Tesla’s board may be losing patience with Musk due to his involvement in politics and his at times volatile collaboration with the Trump administration.

Musk’s deepening involvement in outside ventures, such as his AI firm xAI and aerospace company SpaceX, has raised red flags about how much of his attention is still on Tesla. He has warned he might walk away unless he is given increased authority at the company.

If Musk receives the stock as planned, his ownership share in Tesla would rise from 12.7%—already the largest stake among shareholders—to 15%, based on estimates from Reuters using LSEG data.

Although the board is granting him additional influence, it continues to view Musk as the most capable individual to guide Tesla through its evolving strategic goals and future hurdles.

Before Monday’s award, Musk had no current compensation package in place, and the company noted he had not received substantial earnings since 2017.

Tesla’s board explained that with the legal dispute over the 2018 plan still unresolved, the interim stock grant is a way to ensure they don’t lose access to Musk’s “extraordinary talent.”

{Matzav.com}