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Investing.com -- Tesla (NASDAQ:TSLA) has approved a 96 million share restricted stock award for CEO Elon Musk, according to a company filing on Monday.
The "2025 CEO Interim Award" was approved by the company on Sunday, following a recommendation by a special committee of disinterested directors Robyn Denholm and Kathleen Wilson-Thompson on August 1. The board approved the award with Musk and his brother Kimbal Musk recusing themselves from the vote.
The shares will be issued after termination or expiration of waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act.
Tesla plans to account for the award as restricted stock with a performance condition. The company will recognize compensation expense over the requisite service period only if the vesting becomes probable. The accounting grant-date fair value will be determined when the shares are delivered to Musk.
For illustrative purposes, if approvals had been obtained on August 1, the accounting grant-date fair value would have been approximately $23.7 billion based on that day’s closing stock price.
The company currently expects it will not recognize a compensation expense upon issuance of the award, as it does not believe the performance condition will be met. However, Tesla will reassess this probability at least quarterly.
If the performance condition is later deemed probable during the two-year service period, Tesla will record a catch-up expense. If the condition remains not probable at the end of this period, the company may not recognize any compensation expense.