Editor’s Note: This story has been revised to include new information.
Tesla Inc. (NASDAQ:TSLA) has begun the process to award CEO Elon Musk with the compensation award amid uncertainty over the previous $56 billion pay package.
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Elon Musk To Get 96 Million Tesla Shares As Compensation
Taking to the social media platform X on Monday, Tesla shared a letter addressed to the shareholders of the company, announcing that it will begin the process to compensate Musk. The new pay package is worth around $29 billion.
"Today we announce an important first step in compensating Elon Musk for his extraordinary work at Tesla," the company said in the statement on X, highlighting that Musk hasn't received "meaningful compensation in eight years" since 2017.
No "Double Dip" For Musk
The company also said it was "more important than ever before" to keep Musk as CEO, as Tesla is at “a critical inflection point that has the potential to create continued extraordinary value," for the shareholders.
The statement, issued by Board members Robyn Denholm and Kathleen Wilson-Thompson, stipulates that Musk would receive over 96 million shares in Tesla, each of which trades at just over $300, after anti-trust approval, but says that the shares have a holding period of five years unless Musk has to "cover tax payments or the purchase price."
However, if the Delaware court reinstates Musk's $56 billion pay package, he must forfeit the current compensation. "To put it simply, there cannot be any ‘double dip,'” the statement said.
Musk Fears Losing Control Over Tesla Amid Dwindling Sales
The announcement follows Musk expressing fears of losing control over Tesla, as the billionaire had denied any personal loans tied to his shares in the EV giant. "It is worrying in that I don't want to build millions of robots and then be potentially ousted by activists," Musk said.
The comments come at a difficult time for the company, with sales figures dwindling in multiple markets throughout the world. Tesla's sales in Denmark, Sweden and France declined for the seventh consecutive month.
Delaware Court Ruling And Musk’s $56 Billion Pay Package
The letter also comes in as a Delaware court in 2024 had overruled Musk’s $56 billion pay package, which was approved by the members of Tesla’s Board. Elsewhere, Tesla’s board is set to hold its annual shareholder meeting in November, with experts like Wedbush Securities analyst Dan Ives saying Musk’s pay package would be in focus.
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