In an effort to retain the billionaire entrepreneur at the helm during a pivotal shift from its faltering core auto industry to robotaxis and humanoid robots, Tesla (TSLA.O) has awarded CEO Elon Musk shares worth approximately $29 billion.
The “interim award” of the 96 million new shares was characterized by the business as a first-step, “good faith” payment to honor Musk’s 2018 compensation package, which was over $50 billion and overturned by a Delaware court last year.
If Musk stays in a high-level executive position for two more years and the court does not reinstate the 2018 package that is now being appealed, he is eligible to receive the new award.
He can purchase the shares for $23.34 each, which is the same as the 2018 award’s exercise price, and he must keep them for five years. At its annual investor meeting on November 6, Tesla will also vote on a longer-term CEO remuneration plan.
The goal of the move is to keep Musk, who is the public face of Tesla and the creator of its robotaxi concept, focused on the electric vehicle manufacturer as it manages the transition from its core auto business to cybercabs and robotics.
It also appears to put an end to any rumors that the board may be growing impatient with Musk as a result of the turbulent months that have been marked by the CEO’s political involvement.
The decision to give Musk more authority over the business indicates that the directors still believe he is the most qualified person to handle Tesla’s mounting list of problems in the years to come.
Due to the company’s old car lineup, fierce competition, and Musk’s right-wing political views that have damaged its reputation, sales have been declining.
Since Musk’s endorsement of U.S. President Donald Trump this summer, Tesla’s brand loyalty has drastically decreased, according to S&P Global Mobility data exclusively provided to Reuters on Monday.
Concerns concerning Musk’s loyalty to Tesla, the primary source of his income, have also been raised by his political activity and his larger corporate empire, which includes the AI startup xAI. If Musk doesn’t gain more authority over Tesla, he has vowed to quit.
According to Reuters calculations based on data gathered by LSEG, the new stock award will increase his already highest position in Tesla from 12.7% to over 15%.
