Quick overview

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Elon Musk, the world’s richest man, will spend $2 billion to acquire 96 million shares of Tesla.

 

He will pay the same price per share as outlined in a 10-year pay package that was agreed upon in 2018, which is currently in legal limbo and awaiting a court date for an appeal.

Tesla’s board approved the award of $29 billion worth of shares to Musk, the company’s CEO, following a US court ruling against a previous pay deal.

A recommendation from a “special committee” of the board served as the basis for the award.

Two committee members, Kathleen Wilson-Thompson and Robyn Denholm, who chair Tesla, wrote a letter to shareholders accompanying the announcement in a financial filing. After a judge in Delaware, where the company was incorporated until June of 2024, revoked the previous pay agreement, which was worth $56 billion, it described the award as a “good faith” payment to Musk.

The directors wrote, “We feel we must act to honor the agreement that was made in 2018 to recognize what Elon has accomplished and the extraordinary value he delivered to Tesla and our shareholders.”.

Ultimately, “a deal is a deal.” Denholm and Wilson-Thompson said they read investor letters and posts on X, Musk’s social media platform, and were concerned about his attention to work.

They wrote, “Based on those exchanges, we know that maintaining Elon’s focus on Tesla is one of your main concerns.. “This honor is a vital first step in accomplishing that objective”.

In addition to managing Tesla, Musk is the owner of the AI startup xAI, the brain implant company Neuralink, the social media platform X, and the SpaceX rocket company. Additionally, he has dabbled in Republican politics, which has damaged Tesla’s sales and brand while also alarming shareholders.