Tesla’s board announced a new compensation package for CEO Elon Musk worth about $ 29 billion in shares, with the company reporting “constantly intensifying the AI Talent war and Tesla’s position at a crucial turning point” as reasons for the payment.
The mass remuneration package is distributed through a 2019 shares plan already approved by shareholders, so it will not go to vote, according to a regulatory deposit and Ann LiptonProfessor at the Law School of the University of Colorado. Tesla says it will put a “long -term CEO offset” strategy in a vote at the annual meeting of the company’s shareholders scheduled for November.
The new Musk compensation plan will be completely annulled if the Delaware Supreme Court decides to overturn the January 2024 ruling in January 2024 to abolish Musk’s 2018 compensation package for the way it was negotiated behind the scenes. This remuneration package is worth about $ 56 billion.
Musk is threatened to stop working on AI and Robotics in Tesla Unless acquired more control of the company. These threats preceded what is now a war of many millions of dollars among the largest companies in the field of artificial intelligence, along with a hurry and acquisition.
At the same time, Musk has created his own AI company outside Tesla called XAI, which now owns X, the social media platform. This has happened while Tesla’s sales increase has disappeared and her brand has been damaged by Musk’s participation in Trump’s administration.
Tesla said Monday that his Board of Directors formed a special committee earlier this year, consisting of President Robyn Denholm and board member Kathleen Wilson-Thompson to settle a new package.
The award that eventually decided to include the Musk 96 million shares that will be guaranteed in two years, provided that it is “constantly serving in a higher leading role in Tesla” during this term and holds the stock for five years. Unlike the previous Tesla prize in Musk, this new package does not appear to be linked to goals such as increasing the price of the company’s stock.
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At Tesla Monday Premarket trading price, worth about $ 29 billion. Musk will have to pay a $ 23.34 per share price, bringing the total current value of the prize to it at about $ 26.7 billion. Depending on how the Delaware Supreme Court rules Tesla’s appeal, the package can fall, so “there can be no” double dive “, according to Tesla.
“Elon will not be able to maintain this new award in addition to the options that will be awarded to the 2018 Performance CEO award if the rule of courts to our benefit,” the company wrote.
Tesla said Musk and his brother Kimbal, who is also a member of the Board of Directors, has recalled himself from the process of constructing this new compensation package. Musk’s participation in the 2018 Compensation Package was one of the reasons why Dlaware Chancery Court Chancellor Kathaleen McCormick decided to hit him after a trial caused by a lawsuit.
McCormick said the process of creating this 2018 plan was “deeply wrong” due to the influx of Musk and its deep connections with people to the Tesla board. He also criticized this plan so as not to include terms that will bind Musk with Tesla for “any specified period of time”-a possible reason for the two-year promise included in the new plan.
McCormick’s decision caused disruption among Tesla’s biggest followers and many of its shareholders. It is also what inspired the company to redefine from Delaware to Texas, a state with fewer established shareholders’ protections written in its laws. Tesla went until she kept a shareholder vote to “confirm” the remuneration package. But McCormick confirmed her decision in December 2024, saying that Tesla’s vote and legal arguments were “unprecedented theories [that] Go against multiple executives of stable law. ”
UPDATE: This story and title have been informed to reflect that the award has been approved by the Tesla Board of Directors and no shareholders’ vote.
