Tesla forms special committee to decide upon new pay deal for Elon Musk: Reports

World's richest man and Tesla chief Elon Musk's pay package is likely going to see a change. Tesla's board has formed a special committee which may offer Musk a fresh package of stock options, according to a report by the Financial Times.

Tesla board Chair Robyn Denholm and director Kathleen Wilson-Thompson are part of the two-member committee that will look into Musk's fresh pay package, reported the newspaper, citing sources.

The move, currently in its nascent stage could decide Musk’s future at the company as he awaits an appeal to try to restore his 2018 pay deal worth $56 billion from Tesla. Musk had made the appeal claiming that a lower court judge made multiple legal errors in rescinding the record compensation.

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Notably, the company will explore alternative ways to compensate Musk if Tesla fails to reinstate that 2018 pay deal through a court appeal expected this year, reported the Financial Times.

All about Musk's 2018 pay package judgement

Musk’s 2018 compensation package is at the centere of all the controversies as the 304 million stock options that he was offered, tied to aggressive growth targets, was unlocked by him in 2023, at their peak valuation of $146 billion.

A year later, in January 2024, a Delaware judge ruled that the package was excessive and was approved by a board tilted towards Musk. In its ruling, the court said, the directors acted like "supine servants of an overweening master", reported Business Standard.

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This led to Tesla to appeal as the deal became void. If the company wins the appeal, it will increase Musk's stake in Tesla from 12 per cent to 20 per cent.

Tesla moved its legal incorporation from Delaware to Texas after the judge ruling.