Tesla has approved an interim stock award worth about $30 billion for Elon Musk and said it would put a longer-term chief executive compensation strategy to a vote at the electric vehicle maker’s November 6 annual meeting.
The new agreement includes 96 million shares of the car maker that will vest if Mr 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 $23.34, equal to the price in a deal originally granted in 2018.
Shares in Tesla rose 2.7 per cent to $310.80 before regular trading in New York. The board emphasised the importance of retaining Mr 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 $50 billion was voided by the Delaware Chancery Court after a shareholder lawsuit. That is currently being appealed and a special board committee has been exploring ways to offer Mr Musk a new compensation agreement after shifting Tesla’s legal home to Texas last year.
The proposal underscores Mr Musk’s grip on the company and could ensure that he won’t relinquish the chief executive title in the near term. Mr Musk has served as the car maker’s top executive since 2008. He told Bloomberg in an interview in May that he is committed to still being at the helm in five years.
Tesla’s board is sticking with Mr Musk despite his competing priorities. Besides overseeing four other companies, politics has taken up a lot of Mr Musk’s attention this year. His decision to bankroll President Donald Trump’s re-election campaign and lead the Department of Government Efficiency's effort to remake the federal government sparked a backlash against the electric vehicle maker.
