Tesla Board Plans New Pay Deal for Elon Musk After $56B Package Was Overturned

Tesla Board Working on New Pay Deal for Elon Musk

Tesla’s board of directors is working on a new pay package for CEO Elon Musk after a judge threw out his previous deal earlier this year.

Back in 2018, Tesla had approved a massive $56 billion pay deal for Musk, tied to hitting big performance goals. But in January 2024, a Delaware court ruled the deal was too generous and said the board wasn’t independent enough when it made the decision. That court ruling canceled the entire package.

Now, Tesla is trying to come up with a new plan.

A special committee made up of board chair Robyn Denholm and director Kathleen Wilson-Thompson is exploring options. They’re reportedly looking at creating a new stock-based compensation plan that would still reward Musk for hitting performance milestones in the future. But the new plan would need to go to shareholders for a vote.

Musk has said he wants more control over Tesla’s future direction, especially when it comes to artificial intelligence and robotics. He’s mentioned he’d like at least a 25% ownership stake in the company. That’s raised concerns for some, but also shows how serious he is about staying involved.

Even with the drama, Tesla stock is on the rise. Shares are up over 18% in May and 40% since late April. Investors seem excited about the company’s future, especially with Musk shifting more attention back to Tesla and plans underway for a robotaxi launch in Austin, Texas.

As Tesla continues to move beyond just EVs and into tech and automation, how this new pay deal plays out could shape the company’s next chapter.

Source: Reuters