Tesla reportedly forms committee to Musk’s pay package
Published: 09:53 14 May 2025 EDT
Tesla Inc (NASDAQ:TSLA)’s board has formed a special committee to evaluate CEO Elon Musk’s compensation, which could lead to a new stock options package, The Financial Times (FT) reported, citing people familiar with the matter.
The committee comprises board chair Robyn Denholm and independent director Kathleen Wilson-Thompson, and was established to assess alternative ways to compensate Musk in the event his voided 2018 pay deal is not reinstated through appeal.
The potential new package would likely hinge on Tesla achieving a combination of financial, operational, and share price milestones, according to the FT.
In 2024, a Delaware court struck down Musk’s 2018 compensation agreement, once valued at over $50 billion, calling the approval process flawed and unfair to shareholders.
Musk, who unlocked all the performance-based stock options tied to that deal by 2023, launched an appeal in March, arguing the court made legal errors in its decision.
The FT reported that reissuing the original award poses significant financial and legal hurdles. These include a multibillion-dollar accounting charge for Tesla and a possible 57% tax burden for Musk, as the options’ performance targets have already been met.
The committee has reportedly retained legal advisers with expertise in Texas corporate law, following Tesla’s reincorporation in the state after leaving Delaware.
Last month, Tesla disclosed the formation of the committee without offering specifics, and delayed filing its annual proxy statement while the board considers matters related to Musk’s pay.
Denholm also recently denied a Wall Street Journal report claiming the board had approached executive search firms to explore a replacement for Musk.
