Tesla is awarding CEO Elon Musk 96 million shares of restricted stock valued at approximately 29 billion US dollars (£22 billion), just six months after a judge ordered the company to revoke his massive pay package.
The electric vehicle maker said in a regulatory filing on Monday that Mr Musk must first pay Tesla 23.34 dollars per share of restricted stock that vests, which is equal to the exercise price per share of the 2018 pay package that was awarded to the company’s CEO.
In December, Delaware chancellor Kathaleen St Jude McCormick reaffirmed her earlier ruling that Tesla must revoke Mr Musk’s multibillion-dollar pay package.
She found that Mr Musk engineered the landmark pay package in sham negotiations with directors who were not independent.
At the time, Ms McCormick also rejected an equally unprecedented and massive fee request by plaintiff attorneys, who argued that they were entitled to legal fees in the form of Tesla stock valued at more than five billion dollars.
The judge said the attorneys were entitled to a fee award of 345 million dollars.
The rulings came in a lawsuit filed by a Tesla stockholder who challenged Mr Musk’s 2018 compensation package.
That pay package carried a potential maximum value of about 56 billion dollars, but that sum has fluctuated over the years based on Tesla’s stock price.
Mr Musk appealed against the order in March. A month later Tesla said in a regulatory filing that it was creating a special committee to look at Mr Musk’s compensation as CEO.
Wedbush analyst Dan Ives feels Mr Musk’s stock award may alleviate some Tesla shareholder concerns.
“We believe this grant will now keep Musk as CEO of Tesla at least until 2030 and removes an overhang on the stock,” Mr Ives wrote in a client note.
“Musk remains Tesla’s big asset and this comp issue has been a constant concern of shareholders once the Delaware soap opera began.”
Tesla shares have plunged 25% this year, largely due to blowback over Mr Musk’s affiliation with President Donald Trump.
But Tesla also faces intensifying competition from both the big Detroit car makers, and from China.
In its most recent quarter, Tesla reported that quarterly profits plunged from 1.39 billion dollars to 409 million dollars.
Revenue also fell and the company fell short of even the lowered expectations on Wall Street.
Under pressure from shareholders last month, Tesla scheduled an annual shareholders meeting for November to comply with Texas state law.
A group of more than 20 Tesla shareholders, which have watched Tesla shares plummet, said in a letter to the company that it needed to at least provide public notice of the annual meeting.
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