Tesla seeks to award Elon Musk $56bn pay package

Tesla seeks to award Elon Musk $56bn pay package

Tesla is again seeking to award boss Elon Musk the biggest pay deal in corporate American history, worth $56bn (£44.9bn).

The electrical vehicle (EV) company is asking shareholders to vote on its chief executive’s record-breaking pay that was set in 2018.

However, the deal was rejected by a US judge in January who described it as “an unfathomable sum”.

It comes just days after Musk announced plans to cut more than 10% of its global workforce.

In a memo issued to staff Musk said there was nothing he hated more, “but it must be done”.

Now, his remuneration is in the spotlight – although the proposed compensation includes no salary or bonus.

Instead, the 2018 deal set rewards based on Tesla’s market value rising to as much as $650bn over 10 years. Stock in the EV company is now valued at $500.36bn, according to data.

At the time of her ruling Delaware-based Judge Kathaleen McCormick said the pay deal was unfair to shareholders.

She found Tesla directors, who negotiated the deal, were “perhaps starry eyed” due to Mr Musk’s “superstar appeal” and did not fully inform shareholders.

The decision outraged Mr Musk, who subsequently threatened to move Tesla’s headquarters from Delaware to Tesla.

On Monday, Tesla filed paperwork asking shareholders to approve that move and sign off on the 2018 pay package again.

Board chair Robyn Denholm wrote in a letter included in the regulatory filing: “We do not agree with what the Delaware Court decided, and we do not think that what the Delaware Court said is how corporate law should or does work.”

Musk’s compensation for 2023 was $0, the filing showed, as the billionaire does not take a salary from the company and is compensated through stock options.

“If it is legally advisable, we suggest simply subjecting the original 2018 package to a new shareholder vote,” Tesla said, adding that it still planned to appeal the ruling.

Bloomberg and Forbes estimated Musk’s net worth to be between $198bn and $220bn in November 2023, making him the richest person in the world.