Tesla Board Approves New Compensation Plan for Musk
"Measures to Keep Musk at Tesla"
U.S. electric vehicle company Tesla has approved a compensation plan to grant CEO Elon Musk new shares worth $29 billion (approximately 40.1418 trillion won).
According to major foreign media outlets on August 4 (local time), Tesla approved this compensation plan on the condition that Musk maintains his key executive position through 2027.
After a Delaware court blocked Tesla's massive compensation plan for Musk, which was initially set in 2018, Tesla moved its headquarters to Texas and approved a new compensation plan.
Previously, in December of last year, Judge Kathaleen McCormick of the Delaware court ruled that Tesla's CEO stock option compensation plan, which amounted to $101.5 billion (approximately 146 trillion won) based on the stock price at the time, was not legitimate.
The ruling was based on the judgment that the Tesla board was effectively under Musk's control, making the compensation decision process unfair. Musk and the Tesla board appealed this ruling to the Delaware Supreme Court.
Separately, after the court ruling, the Tesla board formed a special committee to seek a new performance-based compensation plan for Musk. The Tesla special committee emphasized in documents submitted to regulators on this day that the new compensation plan was designed to gradually strengthen Musk's voting rights. The committee stated that this is a key measure for Musk and shareholders to focus on Tesla's business.
However, the committee added that if the Supreme Court rules to reinstate the 2018 compensation plan, the current compensation will be forfeited or offset, and there will be no double payment.
Elon Musk, CEO of Tesla, is watching the men's singles final on the last day of the US Open tennis tournament held at the Billie Jean King National Tennis Center in New York, USA, on September 8 last year (local time). Photo by Yonhap News
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