Judge Revokes Elon Musk's $30 Billion Tesla Pay Package Amid Appeal
A judge ordered Tesla to revoke Elon Musk's $30 billion pay package, citing unfairness. Musk is appealing this decision, coinciding with Tesla's declining profits and sales.
Tesla gives Musk $30 billion in stock after he threatened to leave
Washington Examiner
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Overview
- Elon Musk was awarded a new pay package of $29-30 billion, comprising 96 million restricted shares, after a prior $56 billion compensation plan was invalidated.
- A judge subsequently ordered Tesla to revoke this substantial $29 billion pay package, ruling it unfair to shareholders and a result of sham negotiations with non-independent directors.
- Elon Musk is appealing the judge's order to revoke his compensation, a decision that mandates he pay $23.34 per share for the restricted stock that has already vested.
- This controversial award coincides with a challenging period for Tesla, as its shares have plummeted 25% this year and quarterly profits significantly declined to $409 million.
- Tesla's sales growth and brand image have been negatively impacted by heightened competition, reduced government EV subsidies, and CEO Musk's public involvement in the Trump administration.
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Analysis
Center-leaning sources frame the story by consistently linking Elon Musk's political activities and time spent outside Tesla to the company's recent financial struggles and investor concerns. They present the new $29 billion pay package as being awarded amidst these challenges, often implying his political involvement has negatively impacted the company's performance and stock value.
"This interim award is structured to incrementally increase his voting rights upon grant, which he has repeatedly told us—and shareholders have confirmed—is an important part of incentivizing him to stay focused on the critical work we are doing here at Tesla."
ARS Technica"The huge grant announced Monday has a simpler theory of the case: Don’t worry about the metrics; keeping Musk around will be good for stockholders."
Semafor"The award comes just six months after a Delaware judge ordered the company to revoke his $56 billion pay package from 2018."
CBS News"The plan was also announced during a pivotal moment for the struggling EV maker, which is trying to expand into robotaxis and humanoid robots."
Gizmodo"Tesla has granted its chief executive Elon Musk $29bn (£21.7bn) worth of its shares, in an attempt to keep the billionaire at the firm."
BBC News"Tesla is awarding CEO Elon Musk 96 million shares of restricted stock valued at approximately $29 billion, just six months after a judge ordered the company to revoke his massive pay package."
ABC News"Tesla is awarding CEO Elon Musk 96 million shares of restricted stock valued at approximately $29 billion, just six months after a judge ordered the company to revoke his massive pay package."
Fortune"The decision to award Musk 96 million shares comes as Tesla faces one of its worst sales streaks, with purchases of its vehicles pushed lower by rising competition, government cuts to EV subsidies, and Musk’s polarizing politics."
Semafor"Tesla’s board of directors has announced a new compensation package for CEO Elon Musk worth around $29 billion in shares, with the company citing the “ever-intensifying AI talent war and Tesla’s position at a critical inflection point” as reasons for the payout."
TechCrunch"Tesla is awarding CEO Elon Musk 96 million shares of restricted stock valued at approximately $29 billion, just six months after a judge ordered the company to revoke his massive pay package."
Associated PressArticles (15)
Center (10)
FAQ
The judge revoked Elon Musk's $30 billion pay package citing unfairness to shareholders and because it was a result of sham negotiations with non-independent directors.
Musk must remain a top executive at Tesla for another two years, hold the shares for five years, and can buy them at an exercise price of $23.34 per share, the same as the 2018 award's exercise price.
Tesla's shares have fallen 25% this year, quarterly profits have dropped significantly to $409 million, and sales growth along with brand image have been hurt by increased competition and reduced government EV subsidies.
Tesla is offering the new $29 billion interim award as a 'good faith' retention tool during the appeal of the 2018 $56 billion package struck down by the Delaware court, aiming to keep Musk focused as the company shifts strategic direction.
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