Tesla Offers Elon Musk $29 Billion to Keep Him as CEO
So, Tesla is trying to keep Elon Musk happy (and, more importantly, at the helm) with a massive new stock award. We're talking about 96 million shares, which translates to roughly $29 billion. The idea? To "incentivize" him to stick around amidst all the legal drama surrounding his previous pay package.
You might remember that a Delaware court threw out Musk's original compensation deal, which was worth over $50 billion. The court basically said the deal wasn't fair to shareholders and that Musk had too much influence over it. Awkward, right? Even though shareholders had already approved the pay package twice, the judge stood her ground.
Now, Tesla's going back to shareholders, asking them to approve this new award. They're arguing that Tesla is on the verge of becoming a big player in AI and robotics, and they need Musk's "steady hand" to guide them. I get the sentiment, but Tesla's situation feels a bit shaky these days.
Musk's been pretty vocal about his political views, which, let's just say, haven't been universally embraced. There have been protests and a dip in sales. Plus, Tesla's stock has taken a hit this year. It makes you wonder if all the side projects and political commentary are distracting him from the core business.
Tesla's board seems to think Musk's continued involvement is crucial. They even created a special committee to figure out how to compensate him, claiming he hasn't received "meaningful compensation" in years. "We are confident that this award will incentivize Elon to remain at Tesla," board members wrote. It sounds like they're really trying to convince both Musk and the shareholders.
The new deal has a clause: If Musk's old pay package gets reinstated by the Delaware Supreme Court, this new stock grant would be forfeited. So, no double-dipping. Also, Musk would have to agree to stay on as Tesla's leader until 2027. Shareholders will vote on this at their annual meeting in November.
Tesla has faced challenges lately, with a reversal in fortune. Investors have been pushing Musk to focus on Tesla, especially the self-driving car and robot projects. I mean, the Cybertruck hasn't exactly been a home run, and competition from other automakers, especially in China, is getting fierce.
While Musk is Tesla's largest shareholder, he wants more control over the company. He even mentioned in an earnings call that he wants enough control to ensure Tesla goes in a "good direction," but not so much that he can't be ousted if he "goes crazy." It's a strange statement, but it shows his perspective.
Source: The Verge