Back and forth over Elon Musk's pay cheque: How Tesla splurged to retain its CEO
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No salary or cash bonus. Instead, Musk was offered up to 12 tranches of stock options worth $56 billion if he achieved certain performance-based goals.
Musk could buy Tesla shares at a fixed low price worth $23.34 per share if he crossed the benchmarks.
He had to stay in a top leadership role at Tesla until all 12 tranches were earned, which happened in 2021.
Tesla is granting its chief executive, Elon Musk, shares worth more than $29 billion , according to a regulatory filing on Monday, as the proposed hefty remuneration for the billionaire faces legal challenges.With the latest stock award, the value of Musk 's holding in Tesla stands at around $157 billion.Here's all you need to know about Musk's pivot to becoming the highest-paid CEO in history.Musk joined Tesla in 2004 as chairman of the board after leading Tesla's first major investment round, injecting $6.5 million of his own money. He became CEO of Tesla in October 2008.In 2018, the Tesla board had promised Musk a $50 billion pay package if he met certain business goals. The deal would have allowed him to hold Tesla shares, making him the highest-paid CEO ever.Terms of the pay deal included:However, a Delaware court dismissed the board's approval process in 2024, saying it was 'unfair' to investors and 'favouring' the Tesla CEO. Musk, in response, filed an appeal against the court's ruling in March, stating there were legal errors in the judgment. Meanwhile, Tesla formed a special committee to review the matter and settle Musk's pay deal.The appeal is now pending before the Delaware Supreme Court. Meanwhile, Tesla has formed a special committee to review Musk's pay structure.In the 'interim award', the electric vehicle maker offered Musk 96 million new shares worth $29 billion in 'good faith'.To claim the deal, Musk has to serve as the chief executive at Tesla for at least two more years. Even after getting the shares, he has to hold onto them for five years.According to a Reuters report, Tesla will also put to a vote a longer-term CEO compensation plan at its annual investor meeting on November 6.The move aims to keep Musk as the face of the EV maker as it struggles with falling sales in various geographies.Tesla's new car sales in Britain plummeted nearly 60% to 987 units in July from a year earlier. In addition, deliveries of its China-made Model 3 and Model Y vehicles, including exports to Europe and other markets, reached 67,886 cars last month, down 5.2% from June , data from the China Passenger Car Association showed on Monday.Musk already owns nearly 13% of Tesla shares. The new 96 million shares come with increased voting rights, awarding more than 15%, or 506 million, of the company's shares to the tech billionaire.Tesla's business is undergoing a transformative shift, as it moves into robotaxis and humanoid robots, positioning the company more as an artificial intelligence (AI) and robotics company than an automaker."While we recognise Elon's business ventures, interests, and other potential demands on his time and attention are extensive and wide-ranging… we are confident that this award will incentivise Elon to remain at Tesla," the special committee said in the filing.Tesla's stock price went up more than 3% during trade on Monday. The stock is still down 18.5% so far in the year, but many investors believe Musk's leadership has helped Tesla.
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