On Friday, Tesla Inc. TSLA board member Kimbal Musk defended CEO and his brother Elon Musk‘s newly authorised $29 billion pay bundle, arguing that his brother “deserves to be paid” after years with out compensation, even because the deal faces mounting scrutiny.
Kimbal Musk Speaks Out In Favor Of His Elder Brother
In an look on CNBC’s Squawk Field, Kimbal Musk was requested about Tesla’s controversial inventory award for Elon Musk, which grants him 96 million shares vesting over two years.
“I am not concerned in that course of in any respect,” Kimbal Musk said, noting that unbiased board members authorised the plan. “That being mentioned, I feel my brother deserves to be paid. He has zero pay for the previous 6 to eight years. I do not suppose that is proper. I am going to let the Tesla shareholders make that call, however I consider he must be paid.”
Kimbal additionally addressed hypothesis about Tesla’s relationship with Musk’s AI startup xAI, highlighting Tesla’s deep funding in AI improvement.
“Tesla cannot go with out a deep, deep understanding of AI,” he mentioned. “We’ve got an excellent enterprise relationship with xAI… AI is constructed into all the things you do.”
Additionally Learn: Elon Musk Returns To Intense Work Schedule: ‘Again To Working 7 Days a Week and Sleeping within the Workplace’
Musk was the lowest-paid CEO within the S&P 500 in 2024, as he acquired no compensation from Tesla, since his $56 billion multi-year pay bundle from 2018 was tied up in authorized disputes.
A New $29 Billion Inventory Award Amid Authorized Battles
Earlier this month, Tesla’s board authorised Musk’s new “interim” compensation bundle, granting shares value about $29 billion—down from the record-setting $56 billion pay plan struck down by a Delaware choose in 2024.
Musk and Kimbal recused themselves from the choice, which was finalized by a particular committee of Tesla’s board.
The brand new bundle comes with restrictions, together with a five-year lockup on vested shares, however has been criticized for missing strict efficiency targets.
The SOC Funding Group, which represents union-backed pension funds, has questioned whether or not Tesla violated NASDAQ guidelines by bypassing a shareholder vote.
Analysts, Buyers Weigh In
Beforehand, Wedbush analyst Dan Ives praised the choice, saying it “removes an overhang” from Tesla inventory and secures Musk’s management “no less than till 2030.”
Investor Gary Black echoed the sentiment, calling the bundle “very favorable for Tesla.”
Nonetheless, the Delaware Supreme Court docket is ready to listen to arguments on Musk’s earlier $56 billion bundle, and the SEC is reportedly scrutinizing Tesla’s govt compensation practices.
Tesla Faces Broader Challenges
The controversy over Musk’s pay comes as Tesla faces declining gross sales in key markets, together with a 21% drop in California and elevated competitors within the international EV sector.
In July, Tesla posted second-quarter income of $22.5 billion, marking a 12% decline from the identical interval final 12 months and falling in need of Wall Road’s consensus estimate of $22.8 billion.
Value Motion: Tesla shares rose 6.22% on Friday and added one other 0.42% in after-hours buying and selling, in accordance with Benzinga Professional.
Benzinga’s Edge Inventory Rankings present that whereas TSLA faces short-term strain, it maintains an upward trajectory over the medium and long run. Extra efficiency insights can be found right here.
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Disclaimer: This content material was partially produced with the assistance of AI instruments and was reviewed and printed by Benzinga editors.
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