Key Tesla analyst has plenty to say about Musk’s new package | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Earlier this year Elon Musk rolled into Washington with a song in his heart and a chainsaw in his hands.

The Tesla (TSLA) CEO, who was President Donald Trump’s biggest campaign donor, headed up the Department of Government Efficient, promising to slice and dice fraud, waste and abuse.

But the good times didn’t last long.

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Thousands of federal employees lost their jobs, while the popularity numbers of Musk and the electric-vehicle company tanked. Tesla vehicles and dealerships were vandalized — and then the world’s richest man parted company with Trump in spectacular fashion.

Last month, Tesla missed Wall Street’s second-quarter-earnings expectations with sales falling for the second straight quarter.

Image source&colon; Xin/Getty Images

A Florida jury on Aug. 1 found Tesla partly liable in the 2019 fatal crash of an Autopilot-equipped Model S, and ordered Elon Musk’s automaker to pay $329 million to the family of a deceased woman and an injured survivor, CNN reported.

Lawyers for the plaintiffs said the trial was the first involving the wrongful death of a third party resulting from Autopilot, one of Tesla’s autonomous driver-assistance systems.

Tesla cites Musk’s extraordinary work

Meanwhile, Tesla’s sales of China-made electric vehicles fell 8.4% in July from a year earlier, reversing a small increase in June.

And the company has seen its stock slide nearly 24% this year.

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Through all that, Tesla’s board awarded Musk a new pay package: 96 million restricted shares, valued at about $29 billion. The deal comes several months after a Delaware court rejected for a second time Musk’s 2018 performance award following a shareholder lawsuit. Musk is currently appealing that order.

In a letter from a special board committee, the company said the award was “an important first step in compensating Elon Musk for his extraordinary work at Tesla.”

The committee noted that Musk has not received “meaningful compensation” for eight years since the 2012 CEO Performance Award was last earned in 2017, adding that the “Delaware litigation continues to loom over us after seven years.”

“Today, Tesla is at a critical inflection point that has the potential to create continued extraordinary value for you, the shareholders,” the letter said.

“Through Elon’s unique vision and leadership, Tesla is transitioning from its role as a leader in the electric vehicle and renewable energy industries to grow towards becoming a leader in AI, robotics and related services.”

To succeed, the letter said, Tesla “requires a leader who combines strategic foresight, adaptability, and relentless execution to outperform competition and inspire the team.

“Elon has demonstrated these unmatched leadership abilities time and time again with his unparalleled track record of delivering shareholder value since he joined as a founding figure and spearheaded the transformation of our extraordinary company.”

Analysts: Musk remains a big asset for Tesla

The special committee said it was “imperative to retain and motivate our extraordinary talent, beginning with Elon.”‘

“The war for AI talent is intensifying, with recent months including multibillion-dollar acquisitions of companies and nine-figure cash compensation packages for nonfounder, individual AI engineers,” the committee said.

“Even among this group of highly talented individuals, no one matches Elon’s remarkable combination of leadership experience, technical expertise, and, arguably most importantly, decades-long proven track record of building the most revolutionary and profitable businesses across different industries.”

The letter said that Musk’s business ventures, interests and other potential demands on his time and attention “are extensive and wide-ranging, including his leadership roles at xAI, SpaceX, Neuralink, X Corp., and The Boring Company as well as his other interests.

“We are confident that this award will incentivize Elon to remain at Tesla and focus his unmatched leadership abilities on further creating shareholder value for Tesla shareholders and attracting and retaining talent at Tesla,” the committee said.

“To be clear, losing Elon would not only mean the loss of his talents but also the loss of a leader who is a magnet for hiring and retaining talent at Tesla.”

Wedbush analyst Dan Ives, a big-time Tesla bull, says the company made the right move.

“Musk remains Tesla’s big asset and this [compensation] issue has been a constant concern of shareholders once the Delaware soap opera began,” Ives and his team said in a note to investors.

The analyst said the grant would keep Musk as CEO of Tesla at least until 2030. Ives said “retaining Musk is a must” in the AI talent war that is fully underway across Big Tech.

“We believe this was a strategic move to keep TSLA’s top asset, Musk, [staying] focused at the company, with his priority being to bolster the company’s growth strategy over the coming years,” said Ives, who has an outperform rating and $500 price target on the shares of the Austin group.

The analyst said it would be critical for Tesla’s board to get the long-term compensation strategy in place before the Nov. 6 shareholder meeting, “which would address the elephant in the room and remove a significant overhang on the stock.”