In order to receive any compensation whatsoever for his work as CEO, Elon needed to meet ultra-ambitious financial and operational targets over a 10-year period. Elon met these targets, which created tremendous value for stockholders.
Since award was granted in 2018*
From $2.2 billion loss to $15.0 billion profit**
From 254,530 in 2018 to 1,845,985 in 2023
Fewer metric tons of CO2 prevented from entering Earth’s atmosphere
The 2018 Award did what the independent directors of our Board designed it to do – incentivize
Elon to deliver the type of extraordinary results that most thought were impossible.
The premise of the 2018 CEO Performance Award was simple:
Critically, the CEO Performance Award was designed not only to incentivize Elon to remain at the helm of Tesla, but also to continue to strive for exponential value creation well into the future.
To ensure Elon’s incentives continue to align with stockholder interests, the package requires him to hold any shares awarded through stock options for five years after he exercises those options.
In an unprecedented decision, earlier this year, a Delaware Court stepped in to side with a plaintiff – who owned just nine Tesla shares when he sued Tesla – and ordered the CEO Performance Award be cancelled, despite 73% of disinterested stockholders voting to approve it six years ago.
The Court’s decision, if implemented, means that Elon would not receive any compensation for the tremendous accomplishments that have generated significant stockholder returns in less than six years.
We don’t believe one judge’s opinion should be able to overturn the decisions of millions of our stockholders.
* As measured from March 2018 through year-end 2023.
** Refers to 2017 and 2023 net loss/net income, as disclosed on Form 10-K, respectively. 2023 net income included a one-time non-cash tax benefit of $5.93 billion for the release of valuation allowance on certain deferred tax assets.