Tesla is set to introduce a new stock-based compensation plan aimed at rewarding high-performing employees.
The announcement was made through an internal memo seen by Reuters, where Musk emphasized that the new stock options would be granted based on exceptional performance. The email stated that over the coming weeks, the company would conduct a comprehensive review to identify and reward top performers.
“Over the next few weeks, Tesla will be doing a comprehensive review to provide stock option grants for exceptional performance,” Musk said in the email, which went to employees around the world.
Additionally, there will be an ongoing program to award spot option grants to employees who demonstrate outstanding contributions to the company’s success.
This new initiative comes after the company had to make difficult decisions earlier this year, including canceling merit-based stock compensations for employees, and implementing significant layoffs affecting over 10% of its global workforce.
The timing of the new compensation plan is also notable, as it follows the re-approval of Musk’s $56 billion pay package at the Annual Shareholder Meeting last week. A total of 72% of shareholders voted to approve the pay package, compared to 73% when it was originally approved in 2018.
While the stock compensation will be well received by those employees who earn it, the company’s stock has seen a significant decline recently, dropping 25% since the start of 2024.
