Shulou(Shulou.com)11/24 Report--

According to news on February 21, as the 2018 compensation plan is gradually realized, whether Tesla will once again develop a new sky-high compensation package for his CEO Elon Musk has attracted attention. Analysts believe that in order to retain Musk, Tesla's board of directors may soon announce a new plan.

For now at least, Musk is working for Tesla for free. This is because the CEO has not received any form of cash salary since 2019, when he received only $23760, which is mandated by California's minimum wage law.

Musk became one of the richest men in the world because he received generous stock option awards. If he leads Tesla to achieve different financial and market capitalization goals, he has the right to buy hundreds of millions of Tesla shares at a price below the market price.

In 2012, Tesla shareholders' meeting developed the first 10-year option incentive plan for Elon Musk, which is divided into 10 levels. By the time the plan expired last year, Mr Musk had achieved nine of the 10 pre-set goals and acquired 4.5 per cent of Tesla's shares.

In 2018, Tesla's board of directors developed a second 10-year option incentive plan for Musk, which is divided into 12 levels. If all is done, Musk can get a 12% stake in Tesla. Last month, Tesla disclosed that Musk had received the last batch of option awards granted by the 2018 salary package.

According to Forbes magazine, Musk is now the second richest person in the world, after Bernard Arnault, head of the luxury brand empire LVMH. Musk has a net worth of about $198 billion.

Still, some people think that Tesla's board of directors may soon announce Musk's new sky-high compensation package. "I expect Musk to get an absolutely huge compensation plan," said Daniel Ives, a technology analyst at Wade Bush Securities. "in my opinion, Musk is Tesla's lifeblood and he is a key part of the company's stock premium."

Mr Ives said Mr Musk's new compensation package would reassure investors that he intended to stay at Tesla for a long time and would not try to shift his attention to Twitter, SpaceX, Neuralink, The Boring Company or any of his other companies or interests. He added: "Tesla's board needs to send a clear signal that Mr Musk will remain Tesla's chief executive for most of the next decade."

Of course, some people object to giving Musk sky-high pay. Some of Tesla's shareholders challenged the 2018 compensation package in a Delaware court, even though it received overwhelming shareholder support at the time. The judge who started the case last year has not yet made a decision.

Tesla will hold an "Investor Day" on March 1 and will soon issue a power of attorney to shareholders to announce plans for the annual meeting. If Tesla's board plans to award Mr Musk a new compensation package, details may be announced at both events.

The last time Musk was asked whether he would be awarded a new long-term compensation package was in a conference call with Tesla investors in April 2022, when he refused to answer the question, saying simply: "there is no discussion about increasing my salary yet."

Many investors worry that Tesla will lose Musk. At last year's annual general meeting, some shareholders raised the issue of succession, prompting Mr Musk to say: "as long as I can continue to play a role, I intend to stay at Tesla." He later added: "We do have a talented team here. Therefore, I think Tesla will continue to do a good job, even if I am kidnapped by aliens. So I'm not leaving, just to clarify."

In the federal court case last November, board member James Murdoch (James Murdoch) testified that Musk had identified his successor, but did not disclose the identity of the person.

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