Tesla Board Awards Elon Musk With $29 Billion Pay Package
The Tesla board has announced it's awarding Elon Musk with 96 million restricted shares of the company, worth around $29 billion based on its current share price.
In a letter released on Monday, Robyn Denholm and Kathleen Wilson-Thompson, members of the Tesla board of directors, announced that the pay package is the "important first step in compensating Elon Musk for his extraordinary work at Tesla."
According to the letter, Musk has "not received any meaningful compensation for eight years," and the $29 billion pay package is a "good faith" payment to the CEO.
Musk's 2018 pay package, the highest in U.S. corporate history, has been tied up in legal issues due to an ongoing shareholder lawsuit. In December, a Delaware judge rejected the pay package for the second time, stating Tesla's lawyers had "no procedural ground for flipping" her initial decision. The judge, Kathaleen McCormick, first rejected the pay package in January 2024, stating that the Tesla board "failed to meet their burden" to prove the compensation plan was fair and in shareholders' best interests.
Tesla's shareholder letter says the company has "no clear timeline for resolution" of the lawsuit and that it is waiting to be assigned a hearing date to appear in front of the Delaware Supreme Court.
Related: Is It Fair To Deny The Fruits Of Hard Work? Thoughts On The Voiding Of Elon Musk's US$56 Billion Pay Package
Denholm and Wilson-Thompson wrote that the board is taking "decisive action to recognize the extraordinary value" Musk has brought to the company by unanimously approving the pay package, with Musk and his brother, Kimbal Musk, recusing themselves.
The package dictates that Musk will be able to purchase 96 million Tesla shares at $23.34 per share (the stock's current value is more than $300). In return, Musk must serve continuously in a senior leadership role at Tesla for a two-year vesting term. He also agrees to forfeit or return a portion of this award should his 2018 pay package be approved.
Related: Why Elon Musk's Battle With Delaware Is About More Than a $55 Billion Pay Package
"It is imperative to retain and motivate our extraordinary talent, beginning with Elon," the letter read, citing the ongoing war for AI talent and recent headline-making pay packages for AI engineers.
Tesla's share price rose upon the announcement and is up around 2% today at the time of writing. The stock is down 18% year to date.
Related: The Lawyers Who Fought Against Elon Musk's Pay Package Are Asking $370,000 an Hour in Legal Fees: 'We Did Battle With the Very Best'
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