Tesla has introduced a proposed compensation bundle for CEO Elon Musk that may be value round $29 billion in shares, with the corporate citing the “ever-intensifying AI expertise battle and Tesla’s place at a crucial inflection level” as causes for the payout.
The brand new plan might be put to a vote on the firm’s annual shareholder assembly, which is scheduled for November. It would even be completely voided if the Delaware Supreme Court docket decides to overturn a choose’s January 2024 decision to strike down Musk’s 2018 compensation bundle due to the way it was negotiated behind the scenes.
Musk has threatened to cease engaged on AI and robotics at Tesla unless he gains more control over the company. These threats preceded what’s now a multi-million greenback expertise battle among the many biggest companies in the artificial intelligence space, together with a rush of mergers and acquisitions. Musk has concurrently constructed up his personal AI firm exterior Tesla referred to as xAI, which now owns X, his social media platform.
Tesla said Monday that its board of administrators shaped a particular committee earlier this yr consisting of chairwoman Robyn Denholm and board member Kathleen Wilson-Thompson to be able to kind out a brand new bundle.
The award they finally selected includes giving Musk 96 million shares that can vest in two years, supplied that he “serve constantly in a senior management function at Tesla” throughout that time period and holds the inventory for 5 years. Not like Tesla’s earlier award to Musk, this new bundle doesn’t seem like tied to objectives like rising the corporate’s inventory value.
At Tesla’s Monday pre-market buying and selling value, that may be value round $29 billion. Musk must pay a $23.34-per-share buy value, bringing the entire present worth of the award to him to roughly $26.7 billion. Relying on how the Delaware Supreme Court docket guidelines on Tesla’s attraction, the bundle could also be forfeited so “there can’t be any ‘double dip,’ in keeping with Tesla.
“Elon won’t be able to maintain this new award along with the choices he might be awarded beneath the 2018 CEO Efficiency Award ought to the courts rule in our favor,” the corporate wrote.
Techcrunch occasion
San Francisco
|
October 27-29, 2025
Tesla stated Musk and his brother Kimbal, who can be a board member, recused themselves from the method of developing this new compensation bundle. Musk’s involvement within the 2018 compensation bundle, which was value round $56 billion, was one of many causes why Delaware Chancery Court docket choose chancellor Kathaleen McCormick decided to strike it down following a trial sparked by a shareholder lawsuit.
McCormick stated the method of making that 2018 plan was “deeply flawed” due to Musk’s enter and his deep connections to the individuals on Tesla’s board. She additionally criticized that plan for not together with any phrases that may bind Musk to Tesla for “any set period of time” — a probable motive for the two-year pledge included within the new plan.
McCormick’s resolution brought on an uproar amongst Tesla’s largest followers and plenty of of its shareholders. It’s additionally what impressed the corporate to re-incorporate from Delaware to Texas, a state with fewer established shareholder protections written into its legal guidelines. Tesla went so far as holding a shareholder vote to “re-affirm” the pay bundle. However McCormick confirmed her decision in December 2024, saying the vote and Tesla’s authorized arguments had been “unprecedented theories [that] go towards a number of strains of settled regulation.”