Tesla awards Elon Musk a $29 billion compensation package amid ‘AI talent war’

Tesla has rewarded Elon Musk an equity package worth $29 billion, fueled by the 'AI talent war' pressures.

: Tesla disclosed a $29 billion compensation package for CEO Elon Musk, citing the ongoing AI talent skirmish as a major justification. This payout will be executed via a previously ratified 2019 Equity Incentive Plan without needing another shareholder vote. Musk is poised to acquire 96 million shares, contingent upon maintaining a senior leadership position and the shares vesting over two years. However, the validity of this award hinges on a pending Delaware Supreme Court ruling over his 2018 compensation package deemed 'deeply flawed.'

Tesla has put forth a colossal compensation plan for its CEO, Elon Musk, which is valued at approximately $29 billion in shares. This decision arises amid what Tesla identifies as a growing 'AI talent war,' putting considerable pressure on the company to retain Musk, given his significant contributions and leadership. The new package is part of a 2019 Equity Incentive Plan, which had already received approval from shareholders, thereby negating the need for a fresh voting process.

The company's board, represented by Chairwoman Robyn Denholm and board member Kathleen Wilson-Thompson, reached a consensus on this decision after forming a special committee earlier this year. It's important to note that this compensation package provides Musk with 96 million shares, which will vest over two years. However, Musk is required to be actively engaged in a senior leadership role throughout the vesting period, and the shares must be held for an additional five years.

Should the Delaware Supreme Court overturn a January 2024 decision discrediting Musk's 2018 compensation plan, which was worth around $56 billion, this new package will be null and void. This earlier plan faced a backlash due to its negotiation dynamics that excluded shareholder input, as well as Musk's personal involvement, leading to a ruling by Judge Chancellor Kathaleen McCormick deeming the process 'deeply flawed.'

Musk has publicly stated that his continuation with Tesla's AI and robotics endeavors is contingent upon gaining more control over the company. This pronouncement comes at a time when the corporate world is embroiled in what can be described as a high-stakes talent war for AI experts. Notably, this battle is attracting significant bids from tech giants and spurring numerous mergers and acquisitions in the artificial intelligence realm.

Currently, Musk also manages his own AI organization named xAI, which possesses the social media platform, X. This development comes amidst a period of stagnated sales growth for Tesla and tarnished brand perception, which some attribute to Musk's association with controversial figures within the past U.S. administration.

Sources: TechCrunch, SEC.gov, LinkedIn

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