Tesla grants Elon Musk $29bn in shares
Tesla has bestowed a new stock grant to CEO Elon Musk valued at around $29 billion, designed to keep the billionaire leader as the company shifts from its struggling electric vehicle sector towards robotaxis and humanoid robotics.This grant, consisting of 96 million new shares, is characterized by Tesla as a “good faith” initiative to fulfill Musk’s contentious 2018 compensation deal—initially estimated at over $50 billion—which was annulled by a Delaware court earlier this year due to issues regarding equity and board oversight. A revised long-term compensation proposal will be presented to shareholders for approval during Tesla’s annual meeting on November 6.
Musk, who holds a 13% ownership in Tesla, is steering the company toward becoming a leader in AI and robotics in the face of decreasing auto sales and increasing competition in the electric vehicle arena. Tesla’s previously rapid revenue growth has stagnated, with analysts predicting a second consecutive year of declining sales in 2025.
The new share grant is designed to gradually enhance Musk’s voting power and motivate him to stay with Tesla until at least 2027. The shares come with a five-year holding requirement and can only be exercised at the same $23.34 price set in the 2018 package. Should the courts reinstate the original compensation plan, the new shares will be forfeited or adjusted to avoid double compensation.
Tesla stressed that this grant is essential to ensure Musk remains dedicated to the company’s ambitious objectives. “We are confident this award will encourage Elon to stay at Tesla,” stated a special committee of the board.
Nonetheless, detractors contend that this action undermines the Delaware court's decision. “This is merely a repackaged iteration of what was deemed improper,” commented Charles Elson, a corporate governance specialist.
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