CALIFORNIA: Tesla has approved a share award worth approximately $29 billion for CEO Elon Musk, part of a new compensation deal to ensure his leadership as the company transitions from its struggling auto business to robotaxis and humanoid robots.
The 96 million new shares serve as an initial “good faith” payment, honoring Musk’s 2018 $50 billion package that was voided by a Delaware court.
A long-term compensation plan will be presented for shareholder approval at Tesla’s annual investor meeting on November 6.
The Delaware court had ruled the 2018 package unfair to investors, prompting Musk to appeal in March, arguing legal errors in its cancellation.
Tesla, the world’s most valuable automaker, faces declining sales and stock performance, with Musk pushing the company toward AI and robotics.
A special committee, including chair Robyn Denholm and director Kathleen Wilson-Thompson, stated the new shares aim to gradually increase Musk’s voting power, seen as crucial to keeping him focused on Tesla.
“If the Delaware courts reinstate the 2018 award, this interim grant will be forfeited to prevent double-dipping,“ Tesla clarified in its SEC filing.
Critics, including corporate governance expert Charles Elson, argue the move undermines the Delaware ruling.
Tesla shares rose over 2% premarket but remain down 25% this year due to weak sales, competition, and Musk’s political controversies.
Analysts predict another annual sales decline in 2025. Meanwhile, Tesla’s robotaxi trials in Texas face regulatory hurdles, with no permits yet in California. – Reuters