Tesla’s board is actively developing a new compensation plan for CEO Elon Musk after a Delaware court invalidated his previous $56 billion pay package. The court ruled that the 2018 agreement was excessively generous and approved by a board lacking independence. In response, Tesla has formed a special committee, comprising Chair Robyn Denholm and director Kathleen Wilson-Thompson, to reassess Musk’s compensation.
The new compensation plan is expected to tie Musk’s rewards to Tesla achieving specific financial, operational, and stock performance goals. This approach aims to align Musk’s incentives with the company’s long-term success while addressing previous governance concerns.
The development of this new pay package comes amid investor concerns over Tesla’s declining electric vehicle sales and Musk’s involvement in political matters. Despite these challenges, Musk has recently recommitted his focus to Tesla, contributing to a partial recovery in the company’s stock price. Financial Times
Tesla’s board is navigating complex legal and tax implications in crafting the new compensation plan, especially after relocating the company’s incorporation from Delaware to Texas. The outcome of this process will be closely watched by shareholders and industry observers alike.
