Background on Elon Musk and Tesla
Elon Musk, the CEO of Tesla and SpaceX, is a prominent figure in the technology and automotive industries. As the co-founder of Tesla, he has played a crucial role in transforming the electric vehicle market and making Tesla a leading global brand. Musk’s influence extends beyond Tesla, as he also heads SpaceX, which has revolutionized space travel with its reusable rockets.
Tesla’s Stock Grant to Elon Musk
On Monday, Tesla granted Elon Musk 96 million shares of the company, valued at approximately $29 billion. This decision comes while Musk is embroiled in a legal battle over his compensation.
According to Tesla’s filing with the U.S. Securities and Exchange Commission (SEC), Musk received approval to purchase 96 million shares at the same price of $23.34 per share as when his compensation plan was adopted in 2018.
With Tesla’s stock closing at $302.60 on the New York Stock Exchange last Friday, this provisional package is valued at around $29 billion.
Musk’s Compensation History
Elon Musk’s compensation has been a subject of legal contention for years. In 2018, shareholders approved a compensation plan that would reward Musk with Tesla shares based on achieving specific goals over ten years. Initially estimated at $56 billion, the plan was invalidated by a Delaware judge in January 2024 due to misleading and deceptive information provided to shareholders before the assembly vote.
Despite the judge’s ruling, Musk and Tesla continued to pursue the compensation plan. In June 2024, shareholders again approved the remuneration plan, but in December 2024, the Delaware court rejected it once more. Tesla appealed the decision and established a special committee to study the matter.
Tesla’s Rationale for the Stock Grant
In a statement on Monday, Tesla explained that the special committee and board deliberated carefully about granting this provisional reward amidst an intense “war for talent” in artificial intelligence and Tesla’s critical position at a turning point.
Key Questions and Answers
- What is the purpose of Tesla’s stock grant to Elon Musk? The grant aims to compensate Musk for his future contributions to Tesla and its shareholders, proportionally based on his efforts.
- Why is there a legal battle over Musk’s compensation? The dispute stems from misleading information provided to shareholders before the 2018 assembly vote approving Musk’s compensation plan.
- What is the current status of Musk’s compensation plan? Although the Delaware court has twice rejected the plan, Tesla has appealed the decision and formed a special committee to study the matter.
