The compensation saga of Tesla’s Elon Musk is under the spotlight once again. On Friday, Tesla announced in an SEC filing that the Company is proposing to grant its CEO Elon Musk an equity award that could make him a trillionaire. This new grant, subject to shareholder approval, comes off the heels of Tesla granting Musk an “interim” award in August while his 2018 equity grant goes through the courts.

In light of the news, Equilar examined the key elements from Musk’s 2018 pay package and the latest award from Tesla, highlighting the differences in plan details and target performance goals.

The 2018 options granted to Elon Musk were ordered to be rescinded by the Delaware Chancery Court. The court ruled that Tesla’s shareholders were not fully informed about the 2018 options at the time they were granted. The award, consisting of 303 million options, was considered unprecedented at the time. Not just because of its large grant date fair value (making it the largest equity grant at the time) but because of its vesting structure. The options would only vest if lofty performance goals were met. The award was split into 12 different tranches. Each tranche would only vest if (1) a market capitalization goal was reached, and (2) a corresponding revenue or adjusted EBITDA goal was reached. The full award was earned in early 2023.

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