Elon Musk, already the world's richest man, scored another huge windfall Friday when the Delaware Supreme Court reversed a decision that deprived him of a $55 billion pay package that Tesla doled out in 2018 as an incentive for its CEO to steer the automaker to new heights. Besides padding Musk's current fortune of $679 billion, the restoration of the 2018 pay package vindicates his long-held belief that the Delaware legal system had overstepped its bounds in January 2024 when Chancellor Kathaleen St. Jud ...

Elon Musk, CEO of SpaceX and Tesla, attends the Viva Technology conference at the Porte de Versailles exhibition center in Paris on June 16, 2023.A shareholder named Richard J. Tornetta sued, filing a derivative action in 2018, accusing Musk and the Tesla board of a breach of their fiduciary duties.Musk's 2018 CEO pay package from Tesla, comprised of 12 milestone-based tranches of stock, was unprecedented at the time it was proposed. After it was granted, the pay plan made Musk the wealthiest individual in ...

Core Viewpoint - Elon Musk has been awarded a $1 trillion pay package, marking a historic first in global corporate compensation, which was recently approved by Tesla shareholders [1][2]. Compensation Structure - The pay package is designed to motivate Musk's performance with high targets for remuneration, consisting of 12 tiered grants of restricted stock that are unlocked by achieving specific valuation and operational goals [2][4]. - Market cap triggers for the compensation start at $2 trillion and increase in increments of $500 billion, reaching a maximum of $8.5 trillion, while operational milestones include sales targets and EBITDA tiers starting at $50 billion and maxing out at $400 billion [3][4]. Performance Timeline - Musk has a ten-year window to meet the targets that would trigger the stock grants, with the potential to receive 35.312 million shares, which would increase his stake in Tesla by approximately 1% [4]. Criticism and Concerns - Critics argue that the lower targets may be too easily achievable, while the higher goals could be excessively challenging, raising concerns about the fairness of the pay package and its implications for Tesla shareholders [4][6]. - There are worries that Musk could benefit significantly without fully meeting the ambitious targets, potentially at the expense of shareholders [5][6]. Market Sentiment - Despite the criticisms, Musk and some Wall Street analysts express optimism about the pay package, citing a similar arrangement from 2018 that positively impacted Tesla's share price [5].

Core Insights - Tesla shareholders strongly endorsed Elon Musk's proposed pay package, with approximately 75% voting in favor, which could potentially be worth $1 trillion if all performance milestones are met [2][4] - Following the vote, Tesla's stock price increased by about 3%, indicating positive market sentiment towards the decision [2] - Musk's pay package is contingent upon raising Tesla's market capitalization from around $1.5 trillion to over $8.5 trillion, a significant challenge [3] Shareholder Sentiment - The approval of the pay package was met with enthusiasm from Musk's supporters, who viewed it as a positive step for the company's future [4] - Analysts, including Jesse Fried from Harvard Law School, interpreted the shareholder decision as logical, emphasizing the potential benefits of keeping Musk focused on Tesla [4] - Ian Keas from Gallagher's executive compensation consultancy noted that the unusual nature of the incentive aligns Musk's rewards with clear performance outcomes, suggesting a level of safety for shareholders [4] Criticism and Concerns - Despite the strong endorsement, some criticism arose prior to the vote, with proxy-advisory firm Glass Lewis & Co. advising against the proposal due to concerns over its potential excessive dilution of shareholder value [5] - The pay package was described as "unprecedented," raising significant concerns among some shareholders regarding its implications [5]

Core Points - Rivian has announced a new compensation plan for CEO RJ Scaringe worth up to $4.6 billion over the next decade, similar to Tesla's package for Elon Musk, linked to profit targets and share price milestones [1][4][12] - The plan aims to retain Scaringe and focus on growth and profitability as Rivian prepares to launch its more affordable R2 SUV [2][12] - Rivian's new pay package includes options to purchase up to 36.5 million shares at an exercise price of $15.22, significantly more than his previous grant [5][9] - The payout is contingent on achieving stock price milestones between $40 and $140 per share and new operating income and cash flow targets over the next seven years [8][12] - Rivian's board has doubled Scaringe's base salary to $2 million, aligning his compensation with shareholder returns [13][16] - Scaringe has also been granted 1 million common units in Mind Robotics, a Rivian spinoff, which could give him up to a 10% economic interest [16][17]

Core Viewpoint - Rivian has announced a new pay plan for CEO RJ Scaringe worth up to $4.6 billion over the next decade, which is linked to performance targets and is modeled after Tesla's CEO Elon Musk's compensation package [1][2][4]. Group 1: CEO Compensation Plan - The new compensation plan for CEO Scaringe includes options to purchase up to 36.5 million shares of Rivian's Class A stock, which is approximately 16 million more than the previous grant, at an exercise price of $15.22 per share [6]. - The plan aims to retain the founder and keep him focused on growth and profitability as Rivian prepares to launch its more affordable R2 SUV next year [3][4]. - The revised plan has lower performance goals compared to the previous one, which the board deemed unlikely to be met [3]. Group 2: Industry Implications - Rivian's move reflects a trend among companies to adopt compensation structures similar to Tesla's, tying significant CEO rewards to ambitious market performance goals [2][5]. - The compensation strategy is seen as a way to inspire growth and profitability, although it may pose challenges for leaders to meet targets amid changing economic conditions [5].

Core Viewpoint - Tesla CEO Elon Musk has received shareholder approval for a historic pay package potentially worth up to $1 trillion over the next decade, contingent on achieving significant performance milestones [1][2]. Group 1: Shareholder Approval and Pay Package Details - The proposal was approved with over 75% support from shareholders at Tesla's annual meeting [1]. - Musk's pay package is tied to ambitious targets, with the potential for shareholders to benefit significantly if these goals are met, potentially leading to an $8.5 trillion company valuation [1][4]. Group 2: Analyst Perspectives - Analysts express mixed views on the pay package, with some highlighting the alignment of Musk's compensation with shareholder value creation, as he earns nothing unless he delivers substantial results [1][2]. - Concerns about "key man risk" are noted, but the prevailing sentiment among investors is that Musk's unique capabilities justify the package [2][3]. - The performance-based nature of the stock options means that the financial burden of the pay package is not immediate, allowing for a focus on long-term growth [3].

Core Viewpoint - Influencers and Tesla investors are criticizing Charles Schwab for voting against Elon Musk's pay package, with threats to move their assets to other brokerages if the firm does not align with shareholder interests [1][3]. Group 1: Opposition to Musk's Pay Package - Jason DeBolt highlighted that six of Charles Schwab's ETF funds voted against Tesla's recommendation, managing over 7 million Tesla shares [2]. - The California Public Employees Retirement System (CalPERS), holding over $2 billion in Tesla shares, opposed the pay package, citing concerns over power consolidation [5]. - Proxy advisory firms like ISS and Glass Lewis recommended voting against the pay package, leading Musk to label them as "corporate terrorists" [4]. Group 2: Support for Musk's Pay Package - The pay package has received backing from notable figures such as ARK Invest CEO Cathie Wood, who predicted a decisive win at the shareholder meeting [6]. - TV host Jim Cramer supported the package, asserting that Musk's compensation is justified compared to other CEOs [7]. - The State Board of Administration (SBA), managing over $1 billion in Tesla shares, also endorsed the pay package [7]. Group 3: Performance Metrics - Tesla is noted for strong Momentum and Quality metrics, satisfactory Growth, but poor Value, with a favorable price trend in the short, medium, and long term [8].

Core Viewpoint - The California Public Employees Retirement System (CalPERS) plans to vote against Elon Musk's $1 trillion compensation package, citing concerns over concentration of power and the size of the package compared to other CEOs [1][2]. Group 1: CalPERS Opposition - CalPERS believes the compensation package would "concentrate power in a single shareholder" [2]. - The fund's spokesperson noted that the proposed package is significantly larger than those of other CEOs [2]. - CalPERS owns approximately 5 million shares of Tesla, representing an investment of about $2.3 billion [2]. Group 2: Previous Compensation Package - CalPERS opposed a previous $56 billion pay package, which was struck down by a Delaware court last year, although Tesla has appealed this decision [3]. Group 3: Support for Musk's Compensation - The Florida Retirement System's State Board of Administration supports Musk's pay package, describing it as a "bold, performance-driven incentive structure" [4]. - TV host Jim Cramer and Cathie Wood, CEO of ARK Invest, have also expressed support for Musk's compensation, with Wood predicting a decisive win at the upcoming shareholder meeting [5]. Group 4: Criticism of the Pay Package - Critics, including Ross Gerber from Gerber Kawasaki, have labeled the compensation award as "insanity" and questioned the independence of Tesla's Board of Directors from Musk's influence [6]. Group 5: Musk's Response to Proxy Advisors - During a recent earnings call, Musk criticized proxy advisory firms, calling them "corporate terrorists" and accusing them of making recommendations based on "random political lines" [7].

Core Viewpoint - Tesla Inc. is seeking to reinstate CEO Elon Musk's previously struck down $56 billion pay package, arguing that the shareholder vote to ratify it was highly informed and significant in Delaware's history [1][2][3]. Group 1: Legal Proceedings - Tesla's lawyers claim that the 2024 shareholder vote was the "most informed stockholder vote in Delaware history" [2]. - Jeffrey Wall, representing Tesla, emphasized that shareholders were fully aware of what they were voting for [3]. - The opposing attorney, Greg Varallo, warned that reinstating the pay package could lead to endless lawsuits [3]. Group 2: New Pay Package - Tesla has introduced a new pay package for Musk that could potentially make him a trillionaire if all milestones are met [4]. - The new package could still allow Musk to gain billions even if only one or two milestones are achieved [5]. - A previous $29 billion pay package could grant Musk 96 million shares, but it would be invalidated if the court reinstates the $56 billion package [5]. Group 3: Shareholder Meeting and Stock Activity - Tesla is set to hold a shareholder meeting in November to vote on the new pay package, which is expected to be a key focus of the meeting [6]. - The board has encouraged investors to support all recommendations, with Tesla's Chair praising Musk as a "once-in-a-generation visionary" [6]. - Musk's recent purchase of over $1 billion in Tesla stock contributed to a stock rally, pushing TSLA above the $420 mark, with current premarket trading at $434.36 [6].