Musk gets US$30 billion in ‘good faith’ Tesla stocks ahead of pay vote
Tesla’s board approved a new interim stock award following the voiding of Musk’s previous pay package
The new agreement includes 96 million shares of the carmaker that will vest if Musk continues to serve in the top post for another two years, the company said on Monday in a regulatory filing. The restricted stock has an exercise price of US$23.34, equal to the price in a deal originally granted in 2018.
Shares in Tesla rose 2.7 per cent to US$310.80 before regular trading in New York.
The board emphasised the importance of retaining Musk, saying in a shareholder letter that the award was a first step “good faith” payment. “After all, a ‘deal is a deal.’”
The move comes after a prior compensation package valued in excess of US$50 billion was voided by the Delaware Chancery Court after a shareholder lawsuit. It’s currently being appealed, and a special board committee has been exploring ways to offer Musk a new compensation agreement after shifting Tesla’s legal home to Texas last year.
The proposal underscores Musk’s grip on the company and could ensure that he won’t relinquish the CEO title in the near term. Musk has served as the carmaker’s top executive since 2008. He told Bloomberg in an interview in May that he’s committed to still being at the helm in five years.