Tesla Awards Elon Musk $29 Billion in Stock Compensation
As part of this agreement, Tesla will issue 96 million new shares to Musk. The grant serves as a gesture of goodwill in recognition of a compensation deal originally struck in 2018 but later nullified by a Delaware court. That decision remains under appeal by Musk.
Conditions Tied to Continued Leadership
Musk will only gain access to the newly awarded shares if he continues to serve in a senior executive capacity for the next two years and if the court does not reinstate the previous compensation plan.
The shares must also be held for five years, and Musk retains the right to purchase them at a fixed price of $23.34 per share—mirroring the terms of the 2018 agreement.
Tesla plans to present a revised long-term compensation proposal for Musk at its annual shareholder meeting, scheduled for November 6.
Doubling Down on Musk Despite Mounting Scrutiny
This strategic decision reinforces Tesla's confidence in Musk's leadership as it embarks on a new chapter of innovation and technological development. While his political involvement and commitment to other projects—such as AI startup xAI—have sparked criticism, Tesla's board appears steadfast in its belief that Musk is best equipped to steer the company through upcoming challenges.
Tesla Bets on Musk's Vision Amid Market Pressures
The timing of this package is critical. Tesla has been grappling with declining sales, an aging lineup, intensifying competition, and growing concerns about the impact of Musk's outspoken political views on the brand's public perception. Recent market research indicates a significant drop in customer loyalty since Musk publicly supported former U.S. President Donald Trump last year.
The stock award will increase Musk's ownership in Tesla from 12.7% to over 15%, further cementing his influence over the automaker. Until now, Musk had no active compensation plan and had not received substantial earnings from the company since 2017. The board cited the importance of retaining Musk's 'extraordinary talent' as the litigation surrounding the 2018 package continues to unfold.
Independent Review of the Compensation Plan
A special committee made up of Tesla's board chair Robyn Denholm and independent director Kathleen Wilson-Thompson was formed to assess Musk's pay structure. While acknowledging his numerous ventures, the committee expressed confidence that this package would effectively motivate Musk to maintain his focus on Tesla's future.
However, not everyone agrees with the board's decision. Critics argue that the move sidesteps the Delaware court ruling. Corporate governance specialist Charles Elson remarked that this new plan is merely 'a repackaged version of the previous one deemed invalid,' and added that Musk doesn't require further incentives, as walking away from Tesla would cost him a major portion of his wealth.
Market Reaction Signals Support
Despite the surrounding controversy, the market reacted positively. Tesla shares climbed nearly 2% following the announcement. Analysts interpreted the package as a strategic measure to provide clarity and stability regarding Musk's role in the near term, effectively securing his presence at Tesla for at least two more years.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Argaam
3 hours ago
- Argaam
Saudi Aramco sets Arab crude OSP for September
Saudi Aramco set the official selling price (OSP) for its Arab Light crude for September delivery to North America at $4.2 per barrel above the Argus Sour Crude Index (ASCI). For Western Europe, the Arab Light price was set at $3.35 per barrel above the ICE Brent price, the oil giant said in a statement received by Argaam. The Arab Light crude grade OSP was set at $3.15 above the ICE Brent for Europe - Mediterranean. In addition, the price for East Asia was set at $3.2 more than the average of the Oman and Dubai benchmarks, as shown below: Aramco produces five density-based grades of crude oil: Super Light (greater than 40 degrees), Arab Extra Light (36-40), Arab Light (32-36), Arab Medium (29-32), and Arab Heavy (below 29), according to Argaam 's data.
Al Arabiya
3 hours ago
- Al Arabiya
Trump order lowering tariffs on EU autos still days away, source says
The European Union will likely have to wait a few more days for an executive order by US President Donald Trump lowering tariffs on imports of European cars and car parts, a source familiar with the EU-US negotiations said. It means US consumers will continue to see tariffs of 27.5 percent applied to the imports of cars including German-made BMW and Mercedes-Benz vehicles and Swedish-made Volvos, the source said, rather than the 15 percent rate Trump and European Commission President Ursula von der Leyen agreed in Scotland. The rate will only come down once Trump issues a legally binding executive order. White House officials did not immediately respond to a request for comment. Trump on July 31 issued an executive order setting the EU's baseline tariff at 15 percent, but the order did not cover goods facing so-called Section 232 investigations, including autos, pharmaceuticals, semiconductors, wine and spirits and steel and aluminum. The baseline tariff comes into effect on August 7 at 12:01 a.m. EDT (0401 GMT) with an exemption for goods already in transit or warehoused until Oct. 5. The EU-US framework trade agreement will be implemented in stages through White House executive orders followed by a legally non-binding joint statement, which a senior EU official on Tuesday said was at an 'advanced' stage. Under the terms of the agreement, a 15 percent levy will be applied to EU pharmaceuticals and semiconductors, US officials say. EU officials say 15 percent is a ceiling and that the rate could be lower pending the outcome of the Section 232 investigations. EU and US officials are still negotiating a final list of products that would have either a zero-for-zero duty or a significantly lower most-favored nation rate. The EU wants low or zero rates on spirits, wines, some chemicals and medical devices.
Arab News
5 hours ago
- Arab News
Trump imposes additional 25 percent tariff on Indian goods, relations hit new low
US President Donald Trump on Wednesday issued an executive order imposing an additional 25 percent tariff on Indian goods citing New Delhi's continued imports of Russian oil, sharply escalating tensions between the two countries after trade talks collapsed. The new measure raises tariffs on some Indian goods to as high as 50 percent — among the steepest faced by any US trading partner. The move is expected to hit key Indian export sectors including textiles, footwear, and gems and jewelery and marks the most serious downturn in US-India relations since Trump returned to office in January. It also comes as Indian Prime Minister Narendra Modi prepares for his first visit to China in over seven years, suggesting a potential realignment in alliances as ties with Washington fray. 'India will take all actions necessary to protect its national interests,' India's external affairs ministry said in a statement, saying it was 'extremely unfortunate that the US should choose to impose additional tariffs on India for actions that several other countries are also taking in their own national interest.' It said India's imports were based on market factors and aimed at energy security for its population of 1.4 billion. Trade analysts warned the tariffs could severely disrupt Indian exports. The additional 25 percent tariff comes into effect 21 days after August 7, the order said. 'With such obnoxious tariff rates, trade between the two nations would be practically dead,' said Madhavi Arora, economist at Emkay Global. Indian officials have privately acknowledged growing pressure to return to the negotiating table. A potential compromise could involve a phased reduction in Russian oil imports and diversification of energy sources. A senior Indian official said New Delhi was blindsided by the sudden imposition of the new levy and the steep rate, as both countries continue to discuss trade issues. Trump's decision follows five rounds of inconclusive trade negotiations, which stalled over US demands for greater access to Indian agriculture and dairy markets. India's refusal to curb Russian oil purchases — which surged to a record $52 billion last year — ultimately triggered the tariff escalation. 'Exports to the US become unviable at this rate. Clearly, risks to growth and exports are rising, and the rupee may face renewed pressure,' said Garima Kapoor, economist at Elara Securities. 'Calls for fiscal support are likely to intensify.' Trump's executive order does not mention China, which also buys Russian oil. A White House official had no immediate comment on whether an additional order covering those purchases would be forthcoming. US Treasury Secretary Scott Bessent last week said he warned Chinese officials that continued purchases of sanctioned Russian oil would lead to big tariffs due to legislation in Congress, but was told that Beijing would protect its energy sovereignty. The US and China have been engaged in discussions about trade and tariffs, with an eye to extending a 90-day tariff truce that is due to expire on August 12, when their bilateral tariffs shoot back up to triple-digit figures.
