Tesla Pushes Shareholders for $56B Musk Pay Deal

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Facts

• Tesla requested its shareholders to accept awarding CEO Elon Musk with the largest compensation package in American corporate history, estimated to be worth $56B. In January, a US judge rejected the offer, calling it 'an unfathomable sum.'¹
• Musk's pay package comes only days after he revealed his intentions to reduce more than 10% of Tesla's global workforce. In a memo to his staff, Musk expressed his regret over the layoffs.¹
• Musk's compensation does not include pay or cash bonuses, and the incentive package is based on an expectation that Tesla's market value will rise to $650B in the next ten years. Data shows that Tesla is now worth about $500B.²
• In January, Judge Kathaleen McCormick of Delaware decided the compensation package was unjust to shareholders.³
• Tesla's board chair Robyn Denholm wrote in the regulatory filing that Musk had not been compensated for his work for six years. The filing also indicated that Musk receives stock options rather than company pay.¹
• Tesla indicated in its filing that, if legally feasible, it would return to the original 2018 compensation package for Musk and put it to a new shareholder vote. Tesla also encouraged investors to endorse its decision to relocate its headquarters from Delaware to Texas.²

Sources: ¹BBC News, ²Guardian and ³axios.com.

Narratives

• Narrative A, as provided by Business Insider. Nobody works for nothing, so why should Elon Musk? Tesla has not paid Musk since 2018. That's six years without compensation as the electric car firm has broken record after record and is now the world's most valuable corporation. It is only reasonable that the innovative chief executive gets compensated in proportion to the company's performance.
• Narrative B, as provided by Futurism. They say that timing is everything. In this aspect, the struggling carmaker failed miserably when it asked shareholders for a record payout to Musk. The suggestion comes just days after Musk announced Tesla will cut 10% of its global workforce, and Tesla stock has fallen 37% this year. Awarding Musk this much money is not sound — it's excessive even for Musk.

Predictions