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Tesla, Inc. (NASDAQ:TSLA) announced Monday that its board of directors has approved a grant of 96 million shares of restricted stock to CEO Elon Musk under the company’s 2019 Equity Incentive Plan. The approval was made on Sunday, following a recommendation by a special committee of disinterested directors, Robyn Denholm and Kathleen Wilson-Thompson.
According to a statement in the SEC filing, the shares will be issued following the completion or expiration of the required waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act. The award, referred to as the 2025 CEO Interim Award, is subject to a two-year vesting period. Mr. Musk must remain in continuous service as CEO or as an executive officer responsible for product development or operations, as approved by the board’s disinterested directors, until the second anniversary of the grant date for the shares to vest.
The filing states that the award will be forfeited if there is a final, non-appealable judgment in ongoing Delaware litigation that results in Mr. Musk regaining his ability to exercise a previous 2018 performance-based stock option award. In the event that both awards could be realized, the number of shares under the new award will be reduced to prevent duplication. InvestingPro data shows Tesla maintains strong financial health with a current ratio of 2.04, indicating sufficient liquidity to meet short-term obligations.
Mr. Musk is required to pay $23.34 per share for any vested restricted stock, matching the exercise price of the 2018 CEO Award. He is also subject to a holding period, during which he may not sell, transfer, or dispose of the shares for five years from the grant date, with limited exceptions for tax payments, purchase price, or as permitted by the board.
The company expects to account for the award as restricted stock with a performance condition, recognizing compensation expense only if and when vesting becomes probable. For illustrative purposes, Tesla disclosed that, based on the closing stock price on August 1, the accounting grant-date fair value of the award would have been approximately $23.7 billion, though the actual value will be determined when the shares are delivered. With revenue of $92.7 billion in the last twelve months and an Altman Z-Score of 13.16 indicating strong financial stability, Tesla continues to demonstrate robust operational performance. For deeper insights into Tesla’s valuation and financial metrics, including exclusive ProTips and comprehensive analysis, explore the detailed Pro Research Report available on InvestingPro.
This information is based on a press release statement included in Tesla’s SEC filing.
In other recent news, Tesla has been ordered to pay $329 million by a Miami federal jury in a lawsuit concerning a fatal crash involving its Autopilot driver assist technology. This verdict concludes a four-year legal dispute and might lead to further lawsuits, potentially affecting Tesla’s safety reputation. Meanwhile, Moody’s has affirmed Tesla’s Baa3 long-term issuer rating with a stable outlook, highlighting the company’s strengths in vehicle technology, software, and AI capabilities. These competencies are seen as a foundation for future innovation and expansion into autonomous vehicles.
In the European market, Tesla’s car registrations have seen declines, with a 5% drop in Italy and a significant 48.5% decrease in Portugal in July, compared to the same period last year. Despite these declines, the overall market for light electric vehicles in Portugal rose by about 9.5%. Additionally, Samsung (KS:005930) Electro-Mechanics is reported to be supplying camera modules for Tesla’s Optimus robots, according to Electronic Times. These developments reflect a mix of challenges and opportunities for Tesla in its various business ventures.
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