New York: Tesla has granted CEO Elon Musk a new $29 billion share award after a court voided his previous $50 billion compensation package, citing unfairness to shareholders. The move aims to retain Musk’s leadership role amid strategic shifts toward AI and robotics, declining sales, and rising competition in the electric vehicle market. Tesla has granted 96 million new shares worth about $29 billion to CEO Elon Musk, a move aimed at keeping the billionaire entrepreneur at the helm as he fights a court ruling that voided his original pay deal for being unfair to shareholders.
According to France24.com, in 2024, a Delaware court voided Musk’s 2018 compensation package, valued at over $50 billion, citing that the Tesla board’s approval process was flawed and unfair to shareholders. Musk kicked off an appeal in March against the order, claiming a lower court judge made multiple legal errors in rescinding the record compensation. Earlier this year, Tesla said its board had formed a special committee to consider some compensation matters involving Musk, without disclosing details.
The company added that if the Delaware courts fully reinstate the 2018 CEO Performance Award, the new interim grant will either be forfeited or offset and there will be no "double dip." The interim award shares vest only if Musk remains in a key executive role through 2027. They also come with a five-year holding period except to cover tax payments or the purchase price. Musk must pay Tesla $23.34 per share of restricted stock that vests, which is equal to the exercise price per share of the 2018 CEO Award, the company said in Monday’s filing. Tesla shares rose more than 2% in premarket trading.
The stock has lost about a quarter of its value so far this year as the company grapples with a decline in sales wrought by its aging vehicle lineup, tough competition, and Musk’s political stances that have alienated some potential buyers. Musk, 53, the chief executive of SpaceX and Tesla and the owner of X, formerly Twitter, has thrown his millions, time, and considerable influence into sending the former Republican president back to the White House since endorsing him in July.
Musk has reportedly donated $118 million to his personal pro-Trump political action committee, an organization that collects funds for elections. He’s also appeared on stage with Trump at a campaign rally in Pennsylvania and hosted a series of town halls on his own in the battleground state seen as critical in the November election. Musk, who supported Barack Obama but has become increasingly conservative in recent years, peppers his 202 million followers on X daily with messages championing Trump and denigrating his opponent, Democratic Vice President Kamala Harris.
Democratic vice presidential candidate Tim Walz has accused Musk of spending millions to help Trump "buy an election" and jokingly suggested that the billionaire—not J.D. Vance—is Trump’s real running mate. Trump has pledged if he wins the election to tap Musk to head a "government efficiency commission" tasked with slashing bureaucracy and waste.
Musk already holds a top secret clearance because of SpaceX, which launches rockets for NASA and the Pentagon, and the Wall Street Journal said his contacts with Putin have raised "potential national security concerns" among some members of the Biden administration, although there is no evidence of any "possible security breaches." NASA administrator Bill Nelson said Friday the report "should be investigated."
"If the story is true that there have been multiple conversations between Elon Musk and the president of Russia, then I think that would be concerning, particularly for NASA and the Department of Defense and for some of the intelligence agencies," Nelson said at an event hosted by online news outlet Semafor.
The Journal said the Musk-Putin conversations touched on "personal topics, business, and geopolitical tensions," although at one point the Russian leader asked the US billionaire to avoid activating his Starlink satellite internet service over Taiwan as a favor to Chinese President Xi Jinping. Kremlin spokesman Dmitry Peskov rejected the report, saying "it’s all untrue, absolutely false information."
SpaceX’s Starlink has been a vital communications tool for Ukrainian forces battling Russian troops and Musk "categorically" denied earlier this year that any terminals had been sold to Russia. "My companies have probably done more to undermine Russia than anything," Musk said during a streamed event on X. SpaceX has taken away two-thirds of Russia’s space launch business and "Starlink has overwhelmingly helped Ukraine," he said.
Federal law prohibits paying people to register to vote and the department’s public integrity unit reportedly warned Musk's America PAC in a letter this week that the sweepstakes may be illegal. Adav Noti, executive director of the nonpartisan Campaign Legal Center, denounced the giveaways as "egregious." "It is extremely problematic that the world’s richest man can throw his money around in an attempt to directly influence the outcome of this election," Noti said. "This is not how our democracy should work."