Tesla’s (TSLA) board is reportedly exploring a new CEO pay deal for Elon Musk, who might not get back his $55 billion 2018 compensation package.
According to a new Financial Times report, Tesla’s board created a new “special committee” to explore a new CEO pay package for Musk.
The report points to the committee looking at new stock options and “alternative ways” to compensate Musk if Tesla fails to reinstate his 2018 compensation package, which was rescinded by a judge who found that Musk negotiated the deal with a board under his control and then misrepresented it to shareholders.
Musk is Tesla’s largest shareholder and therefore, he stands to benefit the most when the company does well. However, he doesn’t take a salary for his role as CEO.
Historically, He has received stock compensation packages, with the one secured in 2018 being the controversial one currently under contention.
Since then, no new CEO compensation package has been approved, and Tesla has not suggested another one as it tried to appeal the judge’s decision on the 2018 package.
The company is currently attacking the decision on two fronts with an appeal to the Delaware Supreme Court and a new legislation in Delaware to try to circumvent the decision altogether.
FT reporting that the board is working on a new compensation package with backpay could point to Tesla anticipating not being able to reinstate the original compensation package.
Robyn Denholm and Kathleen Wilson-Thompson are the board members reportedly on the new committee.
Denholm took over from Musk as Tesla’s chair, and she has recently made headlines for selling her Tesla stock options for more than $530 million over the last few years.
Electrek’s Take
It increasingly looks like Tesla won’t be able to distance itself from Musk and separate its fate from his.
Musk has masterfully convinced Tesla shareholders that the destruction of its core business, selling electric vehicles, doesn’t matter because the company is on the verge of solving self-driving – something he has claimed every year for the last 6 years and has been wrong every time.
Now that they don’t care about EVs, there’s no point in blaming Musk for killing demand and delivering a single new vehicle in 5 years, the Cybertruck, a commercial flop.
Therefore, the only thing that will make Tesla shareholders stop wanting Musk as CEO is if they stop believing his self-driving and humanoid robot claims.
