Tesla has announced a stock award of $29 billion for CEO Elon Musk. This decision is part of the company's strategy to transition from traditional automotive business to new areas, including AI and robotics.
Support for Musk's Vision
Tesla's board emphasizes the importance of retaining and motivating top talent, starting with Elon Musk. They stated that Musk has a unique mix of leadership and technical skills, making him a 'proven builder of revolutionary, profitable companies.'
Origin of the Stock Award
The $29 billion stock award is part of a 2018 pay deal that rewarded Musk for meeting significant goals, such as growing Tesla's value and revenue. A judge blocked the implementation of this plan earlier this year over fairness concerns, but shareholders voted to restore it, unlocking Musk's payout.
Shareholder Approval and New Terms
Musk’s new shares only vest if he remains in a key executive role until 2027. Once vested, he must hold them for five years, except to cover taxes or the $23.34 per share purchase price, as set in his 2018 pay plan. If the court restores his initial pay deal, this grant will be canceled or reduced to avoid double compensation.
The new compensation for Elon Musk is a strategic move for Tesla amid declining demand for vehicles, as the company seeks to adapt to changing market conditions.
