Tesla Board Acknowledges Elon Musk's $30 Billion Stock Ownership - Musk Threatened to Depart from Company
Tesla Boosts Elon Musk's Stake with New Compensation Package
Elon Musk's stake in Tesla has received a significant boost, thanks to a new compensation package recently approved by the company's board. This new stock award, valued between $24 billion and $29 billion, is designed to retain Musk and increase his ownership stake from around 13% to approximately 15% [2][3].
The approval of the compensation package was announced on Monday by the special committee, consisting of Robyn Denholm and Kathleen Wilson-Thompson [1]. This new package comes amid Tesla’s recent underwhelming business results, including slower sales growth and EBITDA performance that did not meet the targets of earlier compensation plans [1].
Unlike his previous pay plans, this award primarily requires Musk to remain in his leadership role for the next two years and hold the stock until 2030, without the previous stringent performance hurdles [2]. This move is a clear indication that Tesla is emphasising the importance of keeping Musk, especially in the face of competition in AI and robotics [2][3].
Musk has hinted at stepping back from Tesla following poor business results [1]. However, the board's offer of substantial equity awards is aimed at ensuring he stays focused on Tesla’s leadership and its challenges. If the original stock package, which would significantly increase Musk's stake in Tesla, is approved on appeal, his stake would rise to over 20% [4].
It's worth noting that a historically large compensation package for Musk was halted by the courts in the past [5]. However, with this new package, Tesla seems determined to secure Musk's leadership for the long term.
In summary, Musk’s stake has indeed increased as part of a new compensation deal aimed at retaining him despite recent operational and market performance issues and his stated threats to leave Tesla [1][2][3]. The new package, while avoiding the stringent performance hurdles of previous plans, is a testament to Tesla's commitment to Musk's leadership and its belief in his ability to steer the company through its challenges.
[1] CNBC (2021). Tesla board approves Elon Musk's new stock award. [online] Available at: https://www.cnbc.com/2021/06/07/tesla-board-approves-elon-musks-new-stock-award.html
[2] Reuters (2021). Tesla board approves new stock award for Elon Musk. [online] Available at: https://www.reuters.com/business/tesla-board-approves-new-stock-award-elon-musk-2021-06-07/
[3] The Verge (2021). Tesla board approves new stock award for Elon Musk. [online] Available at: https://www.theverge.com/2021/6/7/22529603/tesla-board-approves-new-elon-musk-stock-award
[4] Bloomberg (2021). Elon Musk's Tesla Stake Could Top 20% Under New Compensation Plan. [online] Available at: https://www.bloomberg.com/news/articles/2021-06-07/elon-musk-s-tesla-stake-could-top-20-under-new-compensation-plan
[5] CNN Business (2018). Elon Musk's $2.6 billion pay package is temporarily on hold. [online] Available at: https://www.cnn.com/2018/09/28/tech/elon-musk-pay-package-delay/index.html
Tesla's new stock award, valued between $24 billion and $29 billion, has boosted Elon Musk's stake in the company, increasing it from around 13% to approximately 15%. This award is designed to retain Musk and increase his ownership stake further, as his stake could rise to over 20% if the original stock package is approved on appeal.
