Tesla awards chief executive Elon Musk $44 billion worth of shares

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17 hours ago

The world's richest man, Elon Musk, has become even richer after Tesla awarded him $US29 billion ($44 billion) worth of shares in the company.
It comes just six months after a judge struck down an even larger pay package worth $US56 billion ($86 billion) after a lawsuit brought by a Tesla stockholder.
Mr Musk, who is the chief executive of the electric vehicle maker, will be awarded 96 million shares in Tesla, but analysts believe it signals the tech billionaire will remain with the company until 2030.
Tesla said in a regulatory filing on Monday that Mr Musk must first pay Tesla $US23.34 ($36.06) per share of restricted stock that vests.
That cost is equal to the exercise price per share of the 2018 pay package that was awarded to the company's chief executive.
In a letter to shareholders, Tesla's board said that Mr Musk hasn't received "meaningful compensation" for eight years.
The board argued that Mr Musk deserved the compensation because he has delivered "transformative and unprecedented growth" that has "translated into immense value generated for Tesla and all our shareholders."
Tesla shares have plunged 25 per cent this year, largely due to blowback over the billionaire's affiliation with President Donald Trump.
Tesla also faces intensifying competition from both the big Detroit automakers and from Chinese EV companies.
In its most recent quarter, Tesla reported that quarterly profits plunged from $US1.39 billion ($2.15 billion) to $US409 million ($632 million). Revenue also fell and the company fell short of even the lowered expectations on Wall Street.
Under pressure from shareholders last month, Tesla scheduled an annual shareholders meeting for November to comply with Texas state law.
A group of more than 20 Tesla shareholders, which have watched Tesla shares plummet, said in a letter to the company that it needed to at least provide public notice of the annual meeting.
Investors have grown increasingly worried about the trajectory of the company after Mr Musk had spent so much time in Washington this year.
He became one of the most prominent officials in the Trump administration in its bid to slash the size of the US government.
In December, Delaware Chancellor Kathaleen St. Jude McCormick reaffirmed her earlier ruling that Tesla must revoke Mr Musk's multi-billion-dollar pay package.
She found that Mr Musk engineered the landmark pay package in sham negotiations with directors who were not independent.
At the time, Judge McCormick also rejected an equally unprecedented and massive fee request by plaintiff attorneys, who argued that they were entitled to legal fees in the form of Tesla stock valued at more than $US5 billion ($7.7 billion).
The judge said the attorneys were entitled to a fee award of $345 million.
The rulings came in a lawsuit filed by a Tesla stockholder who challenged Musk's 2018 compensation package.
Mr Musk has been one of the richest people in the world for several years.
Wedbush analyst Dan Ives said he felt Mr Musk's stock award would alleviate some Tesla shareholder concerns.
"We believe this grant will now keep Musk as CEO of Tesla at least until 2030 and removes an overhang on the stock," Mr Ives wrote in a client note.
"Musk remains Tesla's big asset and this comp issue has been a constant concern of shareholders once the Delaware soap opera began."
AP