Elon Musk and Tesla’s board of directors have reportedly scrapped a controversial $56 billion pay deal that was tied to the company’s stock performance. The decision comes after months of scrutiny and debate, with some shareholders and experts criticizing the plan as excessive and potentially risky.
The scrapped pay deal was first announced in 2018 and would have seen Musk receive billions of dollars in Tesla stock options if he met certain ambitious performance targets, including increasing the company’s market capitalization and achieving specific revenue and profitability goals.
However, the plan was met with criticism from some shareholders who argued that it was too generous and gave Musk too much power. They also expressed concerns that the targets were unrealistic and could lead to risky behavior on the part of Musk.
In recent months, the criticism intensified as Tesla’s stock price soared, putting Musk on track to earn a massive payout. Some shareholders even filed lawsuits to challenge the pay deal.
In light of the controversy, Tesla’s board reportedly decided to revisit the pay plan and ultimately scrapped it altogether. The company said in a statement that it had “mutually determined” with Musk that the plan was no longer “appropriate” and that it would “not pursue” it further.
The decision to scrap the pay deal is a significant development for Tesla and Musk. It removes a major source of controversy and distraction for the company and its CEO. However, it also raises questions about Musk’s future compensation and how he will be motivated to continue leading Tesla.
Some analysts believe that the scrapped pay deal could make it more difficult for Tesla to attract and retain top talent, as Musk was no longer able to offer them the same potential for outsized financial rewards. Others believe that Musk will remain motivated to lead Tesla, even without the prospect of a massive payday, as he is passionate about the company’s mission and has a significant personal stake in its success.
