Tesla board member Kimbal Musk weighs in on his brother's pay package and the idea of Tesla investing in xAI

Kimbal Musk, a member of Tesla's board, recently expressed his thoughts regarding his brother Elon Musk's compensation and the possibility of Tesla investing in xAI, an AI company founded by Elon. During an appearance on CNBC's 'Squawk Box,' Kimbal stated, "I believe my brother deserves to be compensated. He has received no salary for the last six to eight years, which isn’t fair. Ultimately, the decision lies with Tesla's shareholders, but I feel it is necessary for him to be paid." He further emphasized the importance of artificial intelligence for Tesla's future, noting, "Tesla must have a profound understanding of AI. Our relationship with xAI is strong, and while I will let shareholders make the final call, it’s clear that Tesla is an AI-driven company. Just like other advanced tech companies, AI is integrated into everything we do." The discussions surrounding Elon Musk's pay and the potential investment in xAI are particularly timely, with Tesla's shareholder meeting approaching in November. Notably, Elon does not receive a traditional salary or cash bonuses from Tesla; instead, his compensation is tied to performance-based stock awards dependent on the company's milestones. A Delaware judge recently ruled against Musk's previously approved $56 billion pay package, citing that the board did not adequately justify such an unprecedented compensation amount for a CEO. Despite shareholder support, the judge reaffirmed this ruling in December, leading to ongoing appeals that have left Musk without a formal compensation package until August, when Tesla's board approved an interim award of about $29 billion in stock, contingent on Musk's continued leadership for another two years. As the November meeting approaches, shareholders will also vote on a long-term compensation plan for Elon. Kimbal Musk highlighted his brother's aspirations for Tesla to invest in xAI, referencing a tweet from July where Elon stated that, if it were solely his decision, Tesla would have invested in xAI long ago. However, not all shareholders align with the board’s vision; the SOC Investment Group has called for an investigation by Nasdaq regarding Tesla's compliance with listing rules, particularly concerning the interim pay package approval. Additionally, Ross Gerber, a prominent investor in Tesla, has voiced skepticism over the company’s shift from its foundational EV business towards robotics and ride-hailing services.