Tesla Inc. approved an interim stock award worth about $30 billion for Chief Executive Officer Elon Musk and said it would put a longer-term CEO compensation strategy ahead of a vote at the EV maker’s Nov. 6 annual meeting.
The new agreement includes 96 million shares of the automaker that will vest if Musk continues to serve in the top post for another two years, the company said Monday in a regulatory filing. The restricted stock has an exercise price of $23.34, equal to the price in a deal originally granted in 2018.
Shares in Tesla rose 2.7% to $310.80 before regular trading in New York. The board emphasized the importance of retaining Musk, saying in a shareholder letter that the award was a first step “good faith” payment. “After all, a ‘deal is a deal.’”
The move comes after a prior compensation package valued in excess of $50 billion was voided by the Delaware Chancery Court after a shareholder lawsuit. It’s currently being appealed and a special board committee has been exploring ways to offer Musk a new compensation agreement after shifting Tesla’s legal home to Texas last year.
The proposal underscores Musk’s grip on the company and could ensure that he won’t relinquish the CEO title in the near term. Musk has served as the automaker’s top executive since 2008. He told Bloomberg in an interview in May that he’s committed to still being at the helm in five years.
Tesla’s board is sticking with Musk despite his competing priorities. Besides overseeing four other companies, politics has taken up a lot of Musk’s attention this year. His decision to bankroll President Donald Trump’s reelection campaign and lead the DOGE effort to remake the federal government sparked a backlash against the electric vehicle maker.
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