On Friday, Tesla Inc. (NASDAQ:TSLA) board member Kimbal Musk defended CEO and his brother Elon Musk's newly approved $29 billion pay package, arguing that his brother "deserves to be paid" after years without compensation, even as the deal faces mounting scrutiny.
Kimbal Musk Speaks Out In Favor Of His Elder Brother
In an appearance on CNBC's Squawk Box, Kimbal Musk was asked about Tesla's controversial stock award for Elon Musk, which grants him 96 million shares vesting over two years.
"I'm not involved in that process at all," Kimbal Musk stated, noting that independent board members approved the plan. "That being said, I think my brother deserves to be paid. He has zero pay for the past 6 to 8 years. I don't think that's right. I'll let the Tesla shareholders make that decision, but I believe he needs to be paid."
Kimbal also addressed speculation about Tesla's relationship with Musk's AI startup xAI, highlighting Tesla's deep investment in AI development.
"Tesla can't go without a deep, deep understanding of AI," he said. "We have a great business relationship with xAI… AI is built into everything you do."
Also Read: Elon Musk Returns To Intense Work Schedule: ';Back To Working 7 Days a Week and Sleeping in the Office’
Musk was the in 2024, as he received no compensation from Tesla, since his $56 billion multi-year pay package from 2018 was tied up in legal disputes.
A New $29 Billion Stock Award Amid Legal Battles
Earlier this month, Tesla's board approved Musk's new "interim" compensation package, granting shares worth about $29 billion--down from the record-setting $56 billion pay plan struck down by a Delaware judge in 2024.
Musk and Kimbal recused themselves from the decision, which was finalized by a special committee of Tesla's board.
The new package comes with restrictions, including a five-year lockup on vested shares, but has been criticized for lacking strict performance targets.
The SOC Investment Group, which represents union-backed pension funds, has questioned whether Tesla violated NASDAQ rules by bypassing a shareholder vote.
Analysts, Investors Weigh In
Previously, Wedbush analyst Dan Ives praised the decision, saying it "removes an overhang" from Tesla stock and secures Musk's leadership "at least until 2030."
Investor Gary Black echoed the sentiment, calling the package "very favorable for Tesla."
However, the Delaware Supreme Court is set to hear arguments on Musk's earlier $56 billion package, and the SEC is reportedly scrutinizing Tesla's executive compensation practices.
Tesla Faces Broader Challenges
The debate over Musk's pay comes as Tesla faces declining sales in key markets, including a 21% drop in California and increased competition in the global EV sector.
In July, Tesla posted second-quarter revenue of $22.5 billion, marking a 12% decline from the same period last year and falling short of Wall Street's consensus estimate of $22.8 billion.
Price Action: Tesla shares rose 6.22% on Friday and added another 0.42% in after-hours trading, according to Benzinga Pro.
Benzinga's Edge Stock Rankings show that while TSLA faces short-term pressure, it maintains an upward trajectory over the medium and long term. More performance insights are available here.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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