The Tesla board approved granting 96 million restricted shares to CEO Elon Musk, leading to a new pay package valued at $29 billion. This comes after years of litigation regarding Musk's previous compensation, which was rescinded by a Delaware judge. With a bylaw necessitating a 3% stock ownership to challenge Musk's pay, the board deems this award critical to retain him amid competitive talent acquisition in the AI sector. Musk's new deal requires him to serve as CEO for two more years and hold stock until 2030, increasing his ownership stake from 13% to 15%.
"It is imperative to retain and motivate our extraordinary talent, beginning with Elon," Tesla board chair Robyn Denholm and fellow director Kathleen Wilson-Thompson wrote in a letter to shareholders. "The war for AI talent is intensifying, with recent months including multi-billion-dollar acquisitions of companies and nine-figure cash compensation packages for non-founder, individual AI engineers."
Musk's new pay has been held up in litigation for the past seven years after a Delaware judge twice rescinded Musk's previous moonshot megagrant.
Unlike Musk's previous pay plan, which included significant shareholder value hurdles he had to overcome, all Musk has to do to collect the new award is remain with Tesla as CEO for the next two years.
This new deal with Musk will boost his ownership stake from around 13% to 15%, reinforcing Tesla's commitment to retaining its CEO.
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