Tesla’s board is considering new compensation arrangements for Chief Executive Elon Musk as uncertainty grows over the status of his voided $56 billion pay package, the Financial Times reported on Wednesday, citing sources familiar with the matter.
A special committee of the board, consisting of Chair Robyn Denholm and director Kathleen Wilson-Thompson, has been set up to evaluate potential alternatives, including a fresh grant of stock options, the newspaper said.
Denholm has served on Tesla’s board since 2014 and became chair in 2018 after Elon Musk was forced to relinquish the role under a settlement with U.S. regulators.
The move follows a January ruling by a Delaware court that struck down Musk’s 2018 compensation deal, previously the largest ever awarded to a U.S. executive. The court found the board had failed to exercise independent oversight in approving the plan.
According to the report, the board has delayed the release of its proxy filing, potentially postponing its annual shareholder meeting, typically held in May or June. This would give the committee more time to draft a revised proposal for investor approval.
The committee is also exploring ways to recognize Musk’s past contributions if the 2018 package is not reinstated on appeal, the FT said. Any new arrangement would be subject to performance milestones and governed by Texas corporate law, following Tesla’s change of incorporation last year.
Musk, who owns less than 13% of the company, has previously indicated he wants a greater stake in Tesla, citing the need to secure long-term control over its AI-related projects.
His pay package has faced scrutiny as Tesla’s sales declined sharply in recent months across major markets, while the stock price has fallen about 30% year to date over broader concerns over his focus on the EV maker.
The board’s handling of Musk’s compensation has also drawn criticism. In a separate settlement earlier this year, several directors agreed to return more than $900 million to resolve claims over excessive board-level pay, according to the Financial Times.
