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Tesla (NASDAQ:TSLA) rallied in early trading after the company disclosed that it approved an interim stock award of 96 million shares for Chief Executive Officer Elon Musk.
The 2025 CEO Interim Award will vest upon the second anniversary of August 3, 2025, subject to Musk remaining in continuous service as CEO or as an executive officer responsible for product development or operations. Musk must pay the company $23.34 per share of restricted stock that vests, which is equal to the exercise price per share of the 2018 CEO Award. The terms of the award indicate that Musk cannot sell, transfer, or dispose of the shares covered by the 2025 CEO Interim Award until after the fifth anniversary of the grant, except to satisfy taxes owed.
“To recognize what Elon has accomplished and the extraordinary value he delivered to Tesla and our shareholders, we believe we must take action to honor the bargain that was struck in 2018. After all, a deal is a deal,” read Tesla’s (NASDAQ:TSLA) SEC filing.
The CEO compensation package will be placed before a shareholder vote at the company’s annual meeting on November 6.
The interim stock award comes after a prior compensation package valued exceeding $50 billion was struck down by a judge in a decision that is being appealed to the Delaware Supreme Court.
Shares of Tesla (TSLA) traded 2.7% higher in premarket trading on Monday to $302.63 vs. the 52-week range of $182.00 to $488.54.