Elon Musk Secures Record $56 Billion Pay Package From Tesla Shareholders - Details

The pay package, consisting of stock options, stems from a 2018 agreement where Musk was granted options for up to 12% of Tesla's outstanding shares. To collect these options, Musk needed to meet ambitious benchmarks for Tesla's revenue or profit and elevate the company's market value to $650 billion.
Tesla Shareholders Approve Musk's $56 Billion Incentive Deal

Tesla Shareholders Approve Musk's 56 Billion Incentive Deal (Image Source: L: Twitter, iStockphoto)

Tesla's chief executive, Elon Musk, has secured shareholder approval for a monumental $56 billion pay package, the largest incentive deal in US corporate history. This approval, granted by a wide margin, will be finalized in a meeting later this week and positions Musk to become the world's richest person with a net worth of $200 billion. Musk expressed gratitude to investors on social media platform X.
The pay package, consisting of stock options, stems from a 2018 agreement where Musk was granted options for up to 12% of Tesla's outstanding shares. To collect these options, Musk needed to meet ambitious benchmarks for Tesla's revenue or profit and elevate the company's market value to $650 billion.
At the time, these targets seemed unattainable, but Tesla's rapid growth propelled its market capitalization to $1.2 trillion in 2021. Despite a subsequent decline to $545 billion, the market value remained above $650 billion long enough for Musk to secure the options.
This proposal re-emerged for a vote following a judge's decision in Delaware to void the initial pay package, citing concerns that the board was overly influenced by Musk. The judge argued that Musk dictated terms of the package to his allies on the board, leading some shareholders to view the deal as excessively generous.
Supporters of Musk, including Tesla board chair Robyn Denholm, argue that he merits the incentives due to his transformative leadership. Denholm noted that since March 2018, investors have seen returns exceeding 1,000%, attributing this success to Musk's vision and drive. Ron Baron, chair of Baron Capital, echoed this sentiment, asserting, "Tesla is Elon."
Conversely, some shareholders, including Norges Bank Investment Management and the California Public Employees' Retirement System (CalPERS), opposed the package. Critics highlight Tesla's recent financial struggles, noting declines in sales, profits, and market share amid intensifying competition. There are also concerns that Musk's acquisition of social media platform X has diverted his attention from Tesla during a critical period.
In addition to the pay package approval, Tesla's board has sanctioned relocating the company's corporate registration to Texas, home to its largest factory.
Arjit Saxena author

Arjit Saxena is a Senior Correspondent at ET NOW and Times NOW Business Section. He writes on Stock Market, Economy, Startups, Corporates, and Persona...View More

End of Article
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news