Tesla adds to gains as board committee studies new compensation package for Musk

Investing.com -- Tesla Inc (NASDAQ:TSLA) shares gained in pre-open trading Wednesday following reports that the board is looking at new ways to compensate CEO Elon Musk after a record-setting pay package was struck down last year.

Tesla shares are up 2.5% in early trading and 32% since April 24^th.

In an SEC filing at the end of April, Tesla disclosed that its board established a Special Committee to consider certain compensation matters involving CEO Elon Musk.

According to a Financial Times report on Wednesday, citing sources, only two people are on the committee: Chairwoman Robyn Denholm and Kathleen Wilson-Thompson.

In addition to reviewing Elon Musk’s compensation package, the committee is also weighing alternative forms of compensation for his past contributions should Tesla’s effort to reinstate his record-setting 2018 pay deal (worth $98 billion currently) falter on appeal before the Delaware Supreme Court later this year.

Last year, Delaware Chancellor Kathaleen McCormick struck down the record award, calling it excessive.

The fallout from the court’s decision has prompted Musk to consider demanding more control over the electric vehicle manufacturer. Musk has suggested he could step away from Tesla if his terms are not met.

In a related development, Tesla announced a delay in submitting its proxy statement, signaling a potential postponement of its annual shareholder meeting, traditionally scheduled for May or June. The delay will give the committee additional time to develop new compensation proposals for shareholder approval.

As the committee works through initial discussions, the future of Musk’s pay package remains uncertain. Sources told the FT that any new compensation package, including stock options, would be tied to Tesla’s achievement of specific financial, operational, and stock price milestones. However, no firm decisions have been made regarding the structure of Musk’s future pay, nor is there a guarantee of a new package being offered.