Tesla has granted CEO Elon Musk 96 million shares worth about $US29 billion ($A45 billion), a move aimed at keeping the billionaire entrepreneur at the helm as he fights a court ruling that voided his original pay deal for being unfair to shareholders.
In 2024, a Delaware court voided Musk’s 2018 compensation package, valued at over $US50 billion, citing that the Tesla board’s approval process was flawed and unfair to shareholders.
Musk kicked off an appeal in March against the order, claiming a lower court judge made multiple legal errors in rescinding the record compensation.
Earlier this year, the EV maker said the board had formed a special committee to consider some compensation matters involving Musk, without disclosing any details.
Tesla is at a turning point as Musk, its largest shareholder with a 13 per cent stake, shifts focus from a promised affordable EV platform to robotaxis and humanoid robots, positioning the company more as an AI and robotics firm than an automaker.
“While we recognise Elon’s business ventures, interests and other potential demands on his time and attention are extensive and wide-ranging … we are confident that this award will incentivise Elon to remain at Tesla,” the special committee said in the filing.
The award is designed to gradually boost Musk’s voting power, something he and shareholders have consistently said was key to keeping him focused on Tesla’s mission, it added.
Musk must pay Tesla $US23.34 per share of restricted stock that vests, which is equal to the exercise price per share of the 2018 CEO Award, it said in the filing.
Tesla’s stock has lost about a quarter of its value so far this year as the company grapples with a decline in sales wrought by its aging vehicle line-up, tough competition and Musk’s political stances that have alienated some potential buyers.
The challenges have been worsened by US government cuts in support for EVs, with Musk saying at a post-earnings call last month that the waning subsidies could lead to a “few rough quarters” for the company before a wave of revenue from self-driving software and services begins late next year.
Australian Associated Press is the beating heart of Australian news. AAP is Australia’s only independent national newswire and has been delivering accurate, reliable and fast news content to the media industry, government and corporate sector for 85 years. We keep Australia informed.
