Karmactive Staff
Sunita Somvanshi
Tesla’s board has formed a special committee to craft a fresh compensation package for CEO Elon Musk while his appealed $56 billion 2018 pay deal remains voided by Delaware courts.
Board chair Robyn Denholm and independent director Kathleen Wilson-Thompson make up the two-person committee tasked with structuring potential stock options tied to Tesla’s financial, operational and stock performance targets.
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The committee aims to address two key needs: creating a forward-looking compensation plan and finding ways to pay Musk for past work if courts uphold the cancellation of his 2018 package. That original deal awarded Musk stock options based on Tesla hitting specific market value and operational milestones.
In January 2024, a Delaware judge struck down the 2018 package, ruling Musk held too much sway over its approval process. Musk’s legal team continues appealing this decision, arguing the judge misapplied legal standards about his board control and incorrectly labeled standard business connections as conflicts of interest.
The compensation review comes as Tesla shifts strategic focus. While known for electric vehicles, Tesla now positions itself in artificial intelligence, robotics and self-driving taxis. The company faces challenges in EV market growth and stock price pressures.
Denholm recently addressed speculation about Musk’s role, firmly denying reports that Tesla sought his replacement as CEO. Tesla shareholders also showed continued faith by voting to support the original 2018 compensation plan, though the court’s ruling currently prevents its reinstatement pending appeal results.
Musk remains Tesla’s largest individual shareholder with a 13% ownership stake.
