The 96 million shares of common stock will vest upon the second anniversary of August 3, provided Musk continues in his role as CEO or as an executive officer responsible for product development or operations until then.
EV giant Tesla Inc (TSLA) said on Monday that it has approved an award of 96 million shares of restricted stock to CEO Elon Musk.
The company said in a filing with the Securities and Exchange Commission (SEC) that the package was recommended by a special committee on Friday and approved on Sunday. The 96 million shares of Tesla common stock are valued at about $29 billion as per the closing price on Friday.
The special committee was established by the company’s board of directors to consider matters concerning Musk’s pay package after his previous package valued at over $50 billion was voided by a Delaware court, which deemed it excessive.
Musk appealed the court’s order in March.
The 96 million shares of common stock will vest upon the second anniversary of August 3, provided Musk continues in his role as CEO or as an executive officer responsible for product development or operations until then.
Musk must pay the company $23.34 per share of restricted stock that vests, which is equal to the exercise price per share of the 2018 CEO award, Tesla said in the filing.
The new package will be forfeited and returned to the company if, before vesting, there is a final judgment in the ongoing court case pertaining to Musk’s 2018 pay package that results in him becoming able to fully exercise the performance-based stock option award he was granted in January 2018.
The company clarified that Musk will not be able to keep this new award in addition to the options he will be awarded under the 2018 CEO performance award, should the courts rule in his favor.
TSLA stock traded 2% higher in Monday’s pre-market session at the time of writing. Retail sentiment around the stock on Stocktwits, meanwhile, trended in the ‘neutral’ territory.
“….we can all agree that Elon has delivered the transformative and unprecedented growth that was required to earn all milestones of the 2018 CEO Performance Award. This growth has translated into immense value generated for Tesla and all our shareholders,” Tesla directors Robyn Denholm and Kathleen Wilson-Thompson said in a letter to shareholders on Monday. “Rewarding Elon for what he has done and continues to do for Tesla is the right thing to do.”
The directors also expressed confidence that the award will incentivize Musk to remain at Tesla despite his multiple business ventures and interests.
“To be clear, losing Elon would not only mean the loss of his talents but also the loss of a leader who is a magnet for hiring and retaining talent at Tesla,” they said.
The letter further stated that the special committee continues to work to address a longer-term CEO compensation strategy, which it plans to put to a shareholder vote at the November 6 annual meeting.
TSLA stock is down by 25% this year but up by over 52% over the past 12 months.
Read also: Tesla’s Brand Loyalty Nosedived After Elon Musk Endorsed Trump: Report
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