Tesla’s board has approved the award of 96mn shares worth about $30bn to Elon Musk as part of a new pay deal after the billionaire chief executive threatened to leave the electric-vehicle maker if he was not given more stock.
In a filing on Monday, Tesla said the decision was recommended by a special committee formed by the board comprising just the chair, Robyn Denholm, and her fellow director Kathleen Wilson-Thompson. It was then approved by the board.
“Retaining Elon is more important than ever before,” the company said in a letter to shareholders on Monday. “We are confident that this award will incentivise Elon to remain at Tesla.”
Tesla shares were up about 2 per cent in pre-market trading at $309.
Tesla and Musk have been embroiled in a legal battle in Delaware for seven years over a previous $56bn award, the largest in US history. The package was struck down in January 2024 by Delaware judge Kathaleen McCormick, who ruled that it was excessive and said that board members were in thrall to Musk.
Musk has since repeatedly threatened to leave the company unless he is given more control over it. Following lacklustre results last month, Musk renewed that threat, warning that he could “easily be ousted by activist shareholders”.
“I think my control over Tesla should be enough to ensure that it goes in a good direction, but not so much control that I can’t be thrown out if I go crazy,” Musk told investors in a briefing call.
The addition of 96mn shares will raise Musk’s holding from just under 13 per cent to about 16 per cent.
To receive the new award, Musk must pay the company $23.34 per share of restricted stock as it vests, which the company said was equal to the exercise price per share of the 2018 pay award.
Credit: FINANCIALTIMES