Tesla is awarding Elon Musk over $29 billion of stock in an "interim" pay plan designed to maintain his interest in the company while a larger pay package awarded in 2018 remains held up in court.
"Retaining Elon is more important than ever before... It is imperative to retain and motivate our extraordinary talent, beginning with Elon," Tesla Board Chair Robyn Denholm and board member Kathleen Wilson-Thompson wrote in a letter to shareholders today.
The letter noted that Musk has several other companies to run.
"While we recognize that Elon's business ventures, interests and other potential demands on his time and attention are extensive and wide-ranging, including his leadership roles at xAI, SpaceX, Neuralink, X Corp., and The Boring Company as well as his other interests, we are confident that this award will incentivize Elon to remain at Tesla and focus his unmatched leadership abilities on further creating shareholder value for Tesla shareholders and attracting and retaining talent at Tesla. To be clear, losing Elon would not only mean the loss of his talents but also the loss of a leader who is a magnet for hiring and retaining talent at Tesla," the letter said.
The interim award announced in a Securities and Exchange Commission filing is for 96 million shares worth about $29.5 billion based on today's stock price, which was around $307 as of this writing. Musk would pay the company $23.34 per share, the same purchase price in his 2018 pay plan. The 2018 plan was for 303.96 million shares, currently worth over $93 billion.
Tesla and Musk still fighting for bigger pay plan
The 2018 pay plan was voided by the Delaware Court of Chancery in a January 2024 ruling on a shareholder lawsuit. Judge Kathaleen McCormick's ruling said the Tesla board never asked whether the plan was necessary for Tesla to retain Musk, and that "five of the six directors who voted on the Grant were beholden to Musk or had compromising conflicts."