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Tesla Approves US$ 29 Billion Package for Elon Musk, Even After Sales Decline and Court Ruling on Previous Compensation.
Tesla has approved a package of 96 million new shares, valued at approximately US$ 29 billion, for Elon Musk. The aim is to ensure that the entrepreneur remains in charge of the company and continues to be involved in its strategic projects.
The most important thing is that the incentive comes even after a Delaware court annulled, last year, a compensation package of over US$ 50 billion.
In the ruling, the judge pointed out flaws in the approval process and deemed the agreement unfair to shareholders.
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Musk appealed, arguing that the magistrate made errors in judgment. Meanwhile, Tesla sought another way to reward him, this time with specific conditions for release.
Conditions for Payment and Impact on Leadership
To receive the full value in shares, Musk must remain as CEO until at least 2027. Additionally, he will not be able to sell the shares for a minimum period of five years.
The payment also serves to gradually increase his voting power in the company, where he is already the largest shareholder, with a 13% stake.
The board considers this influence essential to keep Musk focused on the Tesla‘s mission.
In an official document, the board stated that despite Musk’s various external demands and interests, it believes that the award will ensure his dedication to the company.
If Musk’s defense prevails in Delaware, the new compensation will offset, avoiding “double compensation.”
Market Context and Challenges
The incentive was approved at a delicate moment. Tesla is facing a decline in global sales and is trying to recover. Musk is betting on transforming the company into a leader in the autonomous driving sector, although currently, its cars and secondary businesses sustain operations.
Last week, the automaker faced another setback. A court ordered the company to pay nearly US$ 250 million for a fatal accident in 2019 involving a Model S in autonomous mode.
Therefore, the billion-dollar package arrives as a sign of internal confidence in Musk’s work but also exposes the pressure for results.
With increasing competition and the need for constant innovation, Tesla bets that keeping its leader in charge is essential to navigate this period of instability.
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