Elon Musk plans stock option grants for Tesla’s high performers, sources say

SAN FRANCISCO – Tesla chief executive officer Elon Musk told employees on June 17 that the electric vehicle (EV) maker is working on stock-based compensation for high-performing employees, according to two people who reviewed an internal memo.

The news of the plan comes just days after Mr Musk

won shareholder approval for his US$56 billion (S$75.7 billion) pay plan

consisting of stock options. It also comes two months after he announced job cuts affecting more than 10 per cent of Tesla’s global workforce in the face of slowing demand for EVs and intensifying price competition from Chinese rivals.

“Over the next few weeks, Tesla will be doing a comprehensive review to provide stock option grants for exceptional performance,” Mr Musk said in an e-mail, according to the two people who reviewed it, and are based in China and the United States, respectively. They declined to be named as the memo is for internal use.

“There will also be an ongoing programme to award spot option grants for anyone who does something outstanding for the company. Thanks for everything you’re doing to make Tesla successful,” the e-mail said.

Tesla did not immediately reply to a Reuters request for comment.

In 2023, Tesla skipped merit-based stock awards for employees, people familiar with the matter said. Tesla’s margins took a hit in 2023 from the company’s aggressive price cuts aimed to revive demand and fend off competition.

Since the start of 2024, Tesla shares have slumped 25 per cent and the EV maker has warned of a sharp slowdown in sales. REUTERS