Today, Tesla has issued 96 million new shares valued at approximately $29 billion to CEO Elon Musk. The move aims to retain Musk’s leadership as he contests a 2018 court decision that invalidated his initial compensation package for being “unfair to shareholders”.
Tesla’s board, Robyn Denholm & Kathleen Wilson-Thompson, posted on X:
“Today we announce an important first step in compensating Elon Musk for his extraordinary work at Tesla. As you know, Elon has not received meaningful compensation for eight years since the 2012 CEO Performance Award was last earned in 2017. Despite overwhelming support from you in 2018 and again in 2024, our legal efforts continue in the Delaware courts to reinstate the 2018 CEO Performance Award. Despite these legal challenges, we can all agree that Elon has delivered the transformative and unprecedented growth that was required to earn all milestones of the 2018 CEO Performance Award. This growth has translated into immense value generated for Tesla and all our shareholders.”
“To recognize what Elon has accomplished and the extraordinary value he delivered to Tesla and our shareholders, we believe we must take action to honor the bargain that was struck in 2018. After all, “a deal is a deal.” Thus, as evidence that Tesla is committed to honoring its promises in the 2018 CEO Performance Award and intends to compensate its CEO for his future services commensurate with his contributions to our company and shareholders, we have recommended this award as a first step, “good faith” payment to Elon.”
Tesla said that the company is at an “inflection point” and needs Musk’s expertise as it shifts from an electric vehicle manufacturer to an AI and robotics-focused company.
The board responded to customer feedback regarding Musk’s reliability and focus, stating, “We would also like to stress that prior to recommending this award, we reviewed your letters, read your X posts, and considered the direct feedback we have received from many of you in order to align our recommendation with your expressed views. From those communications, we know that one of your top concerns is keeping Elon’s energies focused on Tesla. This award is a critical first step toward achieving that goal, although it is limited by the capacity of our current equity incentive plan. As such, we are also working on next steps to address that issue. Still, while our work remains ongoing, we feel it is important to communicate directly and transparently with you all, our shareholders and Tesla’s owners.”
Following the announcement, Tesla shares rose more than 2% in premarket trading.
By CEO NA Editorial Staff
