The American electric vehicle company Tesla approved a compensation plan to grant Chief Executive Officer (CEO) Elon Musk new shares worth $29 billion (approximately 40 trillion won), Reuters reported on the 4th.
The decision to issue new shares stems from Tesla's compensation plan established in 2018 based on Musk's management performance, which was halted by a Delaware court. The Delaware court previously ruled in December that a stock option compensation plan valued at $101.5 billion (approximately 146 trillion won) based on the stock price from that day was unlawful.
The court determined that the Tesla board of directors was effectively under Musk's control, concluding that the approval of the compensation package was essentially equivalent to Musk's decision. As a result, Musk and the Tesla board appealed to the Delaware Supreme Court.
Separately, the Tesla board has been focused on developing a new compensation plan for Musk by forming a special committee. The committee explained through documents submitted to regulatory authorities that the new compensation plan was designed to gradually enhance Musk's voting rights.
The committee noted, "We recognize that Elon's venture business, interests, and potential demands for his time and attention are extensive," emphasizing, "This compensation plan will motivate him to remain at Tesla." They also added that there would be no double payment since the new compensation would be forfeited or canceled if the Supreme Court decides to restore the previous compensation plan.
Additionally, this compensation plan will only be granted if Musk maintains his key executive position until 2027.