Tesla decided on Monday to give CEO Elon Musk roughly $30 billion in restricted stock after the chief executive threatened to leave the electric vehicle maker if he didn’t receive more shares.
The company revealed the news in a regulatory filing, saying Musk must first pay Tesla $23.34 per share of restricted stock as it vests before getting the new award. The stock price is equal to the exercise price per share of Musk’s 2018 pay package, which was revoked by a Delaware judge.
In December, the judge reaffirmed an earlier ruling that found Musk had engineered the massive pay package. It was initially worth up to $56 billion, but that sum has fluctuated depending on Tesla’s stock price.
Tesla said the new award is a “critical first step” in keeping Musk as the CEO “at least until 2030,” an analyst wrote in a client note, allaying Tesla shareholder concerns. “Musk remains Tesla’s big asset and this comp issue has been a constant concern of shareholders once the Delaware soap opera began.”
If reinstated on appeal in Delaware, the 2018 pay package would increase Musk’s ownership of Tesla from under 13% to 20%. In that case, Musk would forgo the new award.
During Tesla’s second-quarter earnings call last month, Musk threatened to quit and raised concerns that he could “easily be ousted by activist shareholders.”
“I think my control over Tesla should be enough to ensure that it goes in a good direction,” he said, “but not so much control that I can’t be thrown out if I go crazy.”
Musk made the statement as Tesla reported a rough second quarter, with revenue down 12% from last year. The drop came after Musk’s public breakup with President Donald Trump, who once employed the billionaire to lead the federal government’s cost-cutting efforts.
JURY ORDERS TESLA TO PAY MORE THAN $240 MILLION IN AUTOPILOT CRASH CASE
Following his departure from the White House, Musk shifted attention back to his business portfolio.
Tesla reiterated its confidence in Musk as its leader, writing to shareholders in a letter that keeping him in leadership “is more important than ever before.” The company added, “We are confident that this award will incentivise Elon to remain at Tesla.”