Tesla approves share award worth $29 billion to CEO Elon Musk
(Reuters) -Tesla has granted CEO Elon Musk 96 million shares worth about $29 billion, a move aimed at keeping the billionaire entrepreneur at the helm as he fights a court ruling that voided his original pay deal for being unfair to shareholders.
In 2024, a Delaware court voided Musk's 2018 compensation package, valued at over $50 billion, citing that the Tesla board's approval process was flawed and unfair to shareholders.
Musk kicked off an appeal in March against the order, claiming a lower court judge made multiple legal errors in rescinding the record compensation.
Earlier this year, the EV maker said the board had formed a special committee to consider some compensation matters involving Musk, without disclosing any details.
Tesla is at a turning point as Musk, its largest shareholder with a 13% stake, shifts focus from a promised affordable EV platform to robotaxis and humanoid robots, positioning the company more as an AI and robotics firm than an automaker.
"While we recognize Elon's business ventures, interests and other potential demands on his time and attention are extensive and wide-ranging ... we are confident that this award will incentivize Elon to remain at Tesla," the special committee said in the filing.
The award is designed to gradually boost Musk's voting power, something he and shareholders have consistently said was key to keeping him focused on Tesla's mission, it added.
Musk must pay Tesla $23.34 per share of restricted stock that vests, which is equal to the exercise price per share of the 2018 CEO Award, it said in the filing.
Tesla shares rose more than 2% in premarket trading.
(Reporting by Aditya Soni in Bengaluru; Editing by Anil D'Silva)
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Star
an hour ago
- The Star
Exclusive-Trump administration to formally axe Elon Musk's 'five things' email
FILE PHOTO: Nov 16, 2024; New York, NY, USA; President-elect Donald Trump talks with Elon Musk (right) during UFC 309 at Madison Square Garden. Mandatory Credit: Brad Penner-Imagn Images/File Photo WASHINGTON (Reuters) -The Trump administration plans as soon as Tuesday to formally axe a program launched by billionaire former Trump adviser Elon Musk requiring federal employees to summarize their five workplace achievements from the prior week, two people familiar with the matter said. The Office of Personnel Management, the federal human resources agency that implemented Musk's push to slash the federal workforce, plans to announce the end of the "five things" email to HR representatives across the federal government later on Tuesday, the two people said, declining to be named because the matter was not public. While many federal agencies had already phased out compliance with the weekly email, the move, not previously reported, signals the Trump administration is turning the page on one of Musk's most unpopular initiatives following a dramatic row between the two men in early June. The White House and OPM did not immediately respond to requests for comment. Musk, who spent over a quarter of a billion dollars to help Trump win November's presidential election, led the Department of Government Efficiency's efforts to slash the budget and cut the federal workforce until his departure in May to refocus on his tech empire. Musk initially received a warm White House sendoff from Trump, but then incurred the president's wrath by describing Trump's tax cut and spending bill as an abomination. Trump pulled the nomination of Musk ally and tech entrepreneur Jared Isaacman to lead NASA and later threatened to cancel billions of dollars worth of federal contracts with Musk's companies after the blowup between the two men. The "five things" email, launched by Musk in February to boost accountability, sparked tensions with department chiefs who were blindsided by the weekend email mandating the move. It also fueled confusion among government workers who received mixed messages about whether and how to comply. Reuters reported in March that the White House installed two Trump loyalists at OPM to ensure better policy coordination between the White House and the agency. Scott Kupor, a venture capitalist who took the helm at OPM in July, foreshadowed the end of the initiative last month, describing processing of the weekly response emails as "very manual" and "not efficient." It is "something that we should look at and see, like, are we getting the value out of it that at least the people who put it in place thought they were," he said. (Reporting by Alexandra Alper; Editing by Sally Buzbee and Rod Nickel)
The Star
8 hours ago
- The Star
Abu Dhabi's MGX could raise up to $25 billion for AI fund, Bloomberg News says
(Reuters) -Abu Dhabi-based MGX is considering plans to raise as much as $25 billion in third-party capital as the investment group looks to ramp up its artificial intelligence holdings, Bloomberg News reported on Tuesday, citing people familiar with the matter. MGX declined to comment on the report and Reuters could not immediately verify it. Company executives are weighing raising money from financial and strategic investors in Abu Dhabi and beyond, but Mubadala Investment Co and AI firm G42 will remain MGX's main backers, the report said. No final decisions have been made, according to the report. MGX, which has invested in OpenAI and Elon Musk's xAI, is chaired by Sheikh Tahnoon bin Zayed Al Nahyan, the UAE's national security adviser and a brother of UAE President Sheikh Mohammed bin Zayed. The Financial Times reported last week that French AI startup Mistral is in talks with MGX and other investors to raise $1 billion at a valuation of $10 billion. (Reporting by Dheeraj Kumar in Bengaluru; Editing by Mrigank Dhaniwala and Devika Syamnath)
The Star
9 hours ago
- The Star
Analysis-Autopilot verdict deals Tesla a 'black eye', threatens Musk's robotaxi ambitions
SAN FRANCISCO (Reuters) -A court verdict against Tesla last week, stemming from a fatal 2019 crash of an Autopilot-equipped Model S, could hurt its plans to expand its nascent robotaxi network and intensify concerns over the safety of its autonomous vehicle technology. A Florida juryordered Musk's electric vehicle company on Friday to pay about $243 million to victims of the crash, finding its Autopilot driver-assistance software defective. Tesla said the driver was solely at fault and vowed to appeal. The verdict follows years of federal investigations and recalls related to collisions involving Tesla's autonomous-vehicle technology, and comes as CEO Elon Musk seeks regulatory approval to rapidly expand the robotaxi service across the U.S. "The public perception of this verdict or things like this are going to fuel pressure on regulators to say, 'We just can't let this stuff be launched without a lot more due diligence'," said Mike Nelson, founder of Nelson Law and an expert on legal issues in the mobility sector. Tesla could havea tough time convincing state regulators that its technology is road-ready, threatening Musk's goal of offering robotaxis to half the U.S. population by year end, legal experts and Tesla investors said. Expanding its robotaxi service is crucial for Tesla as demand for its aging lineup of EVs has cooled amid rising global competition and a backlash against Musk's far right political views. Much of Tesla's trillion-dollar market valuation hinges on his bets on robotics and artificial intelligence. Success in the self-driving realm will requirewinning the confidence of regulators and potential customers on the full-self driving (FSD) software that underpins Tesla's robotaxis, analysts said. "The timing (of the verdict) for Tesla in light of the FSD rollouts and robotaxis is awful," said Aaron Davis, co-managing partner at law firm Davis Goldman. "Now there's essentially an opinion that some aspect of Tesla's business is not safe and maybe the safety that the company advertises isn't what it's cracked up to be." The FSD is an advanced version of Autopilot. Autopilot, which was been updated since 2019, controls speed, distance and lane centering on highways, while the FSD can operate on city streets, helping the vehicle make automatic turns and change lanes. "This case does not have direct implications for Tesla's FSD roll-out," analysts at Piper Sandler said in a note on Sunday, citing the modern iterations of the software. A spokesperson on behalf of Tesla acknowledged the company had received a request for comment from Reuters but had not provided one by the time of publication. REGULATORY ROAD AHEAD Perfecting autonomous vehicles has been harder than expected. The high costs of hardware, years of trial and error, and regulatory hurdles have forced many players to close shop or pivot, including General Motors' Cruise unit. Musk, however, has pursued what he calls a simpler and cheaper path, relying only on cameras and AI instead of pricey sensors such as lidars and radars used by Alphabet's Waymo, Amazon's Zoox and others. After years of missed deadlines, Musk rolled out a small robotaxi trial in June with about a dozen Model Y crossover SUVs in Austin, Texas, each overseen by a human safety monitor in the front passenger seat. While Musk has said Tesla was being "super paranoid about safety", he has also pledged to expand the service fast and make it available for half of the U.S. population in the next five months - a stark contrast to Waymo's cautious years-long rollout. Until Tesla's entry, Waymo was the only U.S. firm to operate a paid, driverless robotaxi service. Tesla is currently awaiting approvals in several states, including California, Nevada, Arizona and Florida. California's department of motor vehicles declined to comment on the impact of the verdict on regulatory approval. Nevada said it held talks with Tesla about a robotaxi program several weeks ago, while Arizona said it was still considering Tesla's request for certification. Both did not comment on the verdict. Florida did not respond. Tesla has typically either won other Autopilot litigation or resolved the case with the plaintiffs out of court. The Florida verdict stands such cases are pending. The case involved a Model S sedan that went through an intersection and hit the victims' parked Chevrolet Tahoe as they were standing beside it. The driver had reached down to retrieve a dropped cellphone and allegedly received no alerts as he ran a stop sign before the crash. The jury found that Tesla's Autopilot had a defect and held the company partially responsible, despite the driver admitting fault. "It's going to take time to get regulators to move forward and time being more than the end of the year," said Gene Munster, managing partner at Deepwater Asset Management, a Tesla investor. "From an image standpoint, it's a black eye." (Reporting by Abhirup Roy in San Francisco; Editing by Mike Colias and Himani Sarkar)
