Tesla just announced a $29 billion pay package for Elon Musk, saying 'no one matches' the CEO
The EV giant's board announced on Monday that it had granted Musk a "good faith" CEO performance award of 96 million restricted shares of Tesla stock, worth just over $29 billion based on the stock's current value.
It comes as Musk's 2018 pay package, which was worth about $46.8 billion in June, remains in limbo after being struck down by a Delaware judge last December.
In a letter to shareholders, the Tesla board members Robyn Denholm and Kathleen Wilson-Thompson said the new package was necessary to "retain and incentivize" Musk amid an "ever-intensifying AI talent war."
"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," Denholm and Wilson-Thompson wrote.
"Even among this group of highly talented individuals, no one matches Elon's remarkable combination of leadership experience, technical expertise, and, arguably most importantly, decades-long proven track record of building the most revolutionary and profitable businesses across different industries," they added.
Both Musk and Tesla have fiercely criticized the decision to strike down the 2018 pay package after a shareholder lawsuit, with the billionaire launching an appeal in March.
In a Securities and Exchange Commission filing also posted on X, the Tesla board members said the new $29 billion "CEO Interim Award" would include a requirement that Musk serve continuously in a senior leadership role at Tesla during the two-year vesting term.
The award is also structured to "incrementally increase" Musk's voting rights upon grant. Musk has repeatedly expressed concern about his level of control over Tesla. In January, he said on X that he felt "uncomfortable" expanding the EV company's AI and robotics capabilities without having about 25% voting control.
Denholm and Wilson-Thompson wrote that Tesla's board had voted unanimously to award Musk the interim award, with Musk and his brother, Kimbal, recusing themselves.
Tesla shareholders would have a chance to vote on a longer-term CEO compensation strategy at the company's annual shareholder meeting in November, the letter added, and the interim award would be forfeited or returned if Musk's 2018 pay package is reinstated to avoid a "double dip."
Investors have expressed concern over Musk's commitment to Tesla in recent months amid Tesla's poor performance and the billionaire's high-profile involvement in US politics.
Tesla's share price is down about 25% this year. The stock is roughly 3% higher in premarket trading following the board's announcement.
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