By Emmanuel Nduka
Tesla is awarding CEO Elon Musk 96 million shares of restricted stock valued at approximately $29 billion, just six months after a court ordered the company to void his previous multibillion-dollar compensation deal.
According to a regulatory filing on Monday, Musk will be required to pay $23.34 per share for the restricted stock to vest, an amount identical to the exercise price in the 2018 performance-based pay package previously approved by Tesla shareholders.
The move follows a December ruling by Delaware Chancellor Kathaleen St. Jude McCormick, who found that Musk had influenced the creation of the 2018 pay deal through improper negotiations with Tesla directors who lacked independence. The court ordered that the deal be rescinded in full.
McCormick also denied a separate, unprecedented request by the plaintiff’s attorneys for over $5 billion in Tesla stock as legal fees. She instead awarded them $345 million.
The legal battle began with a shareholder lawsuit challenging the fairness and legality of Musk’s 2018 compensation plan. That package, originally pegged at a potential value of $56 billion, has fluctuated with the company’s stock price.
Musk appealed the court’s decision in March. A month later, Tesla announced the formation of a special board committee to reevaluate Musk’s pay as CEO.
Despite the ongoing legal proceedings, Tesla’s latest action signals the company’s intention to uphold what it describes as a shareholder-supported, performance-driven reward structure for its chief executive.
