Kimbal Musk on Elon's Tesla pay package: 'My brother deserves to be paid'

Kimbal Musk, the brother of billionaire Elon Musk, voiced his strong support for his sibling's compensation during a recent interview on CNBC's "Squawk Box." He stated, "I think my brother deserves to be paid," highlighting that Elon has not received a salary for the past six to eight years. Kimbal expressed his belief that this situation is unjust, while leaving the final decision regarding compensation to Tesla's shareholders. Elon Musk's remuneration model at Tesla has been unconventional; he does not receive a salary or cash bonuses. Instead, he is awarded "performance awards" in the form of stock options contingent upon the company achieving specific milestones. Recently, Tesla allocated an interim pay package to Elon Musk that consists of 96 million shares, potentially worth around $29 billion. These shares are set to vest in two years, depending on his continued role as CEO or in another executive capacity. This new compensation plan was sanctioned by a special committee within Tesla's board, which included board members Robyn Denholm and Kathleen Wilson-Thompson. Both Elon and Kimbal Musk recused themselves from the decision-making process. This development follows a court ruling last December that mandated Tesla to nullify Elon Musk's previous $56 billion compensation plan from 2018, which was recognized as the largest executive pay package in U.S. history. In a post on X (formerly known as Twitter) earlier this year, Elon Musk expressed a desire for greater control over Tesla, indicating he wanted approximately 25% voting control to maintain influence without being overpowered. Meanwhile, he has been pursuing other projects, including his recent AI initiative, xAI, founded in Nevada in March 2023. The latest pay package granted to Elon Musk did not undergo a shareholder vote and is contingent upon the outcome of an appeal in Delaware. The SOC Investment Group, which collaborates with pension funds, has urged Nasdaq to investigate Tesla, asserting that the board should have sought shareholder approval for the new compensation under Nasdaq's regulations. The special committee has indicated plans to develop a long-term CEO compensation strategy to present for shareholder approval at Tesla's annual meeting in November.