Tesla moves to give Elon Musk more than $114 billion in stock
Elon Musk is inching closer to becoming a trillionaire.
Tesla Inc. will register 303,960,630 shares of Tesla’s common stock to CEO Elon Musk under his 2018 pay package, according to a new filing with the Securities and Exchange Commission. The current share price of about $378 makes those shares worth more than $114 billion.
The move represents a hard-fought victory for Musk. A pay package first proposed in 2018 had been invalidated by a Delaware court, which ruled it was improperly granted and that Tesla’s board lacked sufficient independence. Tesla appealed, and the Delaware Supreme Court restored the package in December.
While the legal battle was ongoing, Tesla’s board created an interim compensation package worth $29 billion, with the understanding it would be revoked if the 2018 award were reinstated. Last week, an SEC filing confirmed that Tesla had formally rescinded that interim package.
“These actions are consistent with the ‘no double dip’ principle, which precludes Mr. Musk from getting a windfall in the event that he may exercise the 2018 CEO Performance Award,” the filing noted.
With the interim package now withdrawn and the original award reinstated, Tesla is clearing the way for Musk to receive the more lucrative compensation tied to the 2018 plan. The company has also floated a future compensation framework that could be worth up to $1 trillion.
A quarterly filing with the SEC noted that Musk entered into an implementation agreement with Tesla earlier this month, focused on “retaining Mr. Musk’s continued service at a critical time for the Company.” Musk and his brother Kimbal Musk, a fellow director, were recused from a vote in which the board approved Tesla’s entry into the implementation agreement on April 21.
Still, Musk will have to meet specific targets in the next 10 years — such as deploying 1 million robotaxis or delivering 20 million vehicles — in order to receive the full payout. Tesla recently expanded its robotaxi operations to Dallas and Houston, though its fleet in both cities remains small. The company reported deliveries of 358,023 cars from January through March, a 6% increase from a year ago.
Other requirements baked into the agreement outline Musk’s fulfillment of continuous service as CEO or as an executive officer responsible for product development or operations through Jan. 19, 2028. The agreement also includes a five-year holding period for the shares. These aspects of the agreement, the filing notes, offer a path to “mitigate potential negative impacts on the company.”