- The package will grant Musk $2.6 billion in stock options if the company hits key milestones in 10 years.
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Tesla is rallying after shareholders approve Elon Musk's compensation (TSLA)
Tesla's shareholders are expected to vote on Elon Musk's compensation package on Wednesday.
Shares of Tesla were rallying, up 3.5%, after shareholders voted to approve chairman and CEO Elon Musk's compensation package.
The pay package will better align Musk's interests with the company as it will grant him $2.6 billion in stock options based on performance targets. The "compensation performance award" will give Musk options with 12 potential vesting tranches if the company hits performance targets on both a top- and bottom-line basis over 10 years, according to the SEC proxy filing.
Musk will not receive any salary, cash bonuses, or equity that vests "simply by the passage of time," Tesla's board said in the filing.
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Musk and his brother, Kimbal, both members of the board, have recused themselves from the vote.
The vote comes amid a slump in Tesla's stock performance. Its shares have fallen 18.5% since hitting an all-time high in September.
Many industry watchers have cast doubts on the company's ability to move past its production bottlenecks, largely precipitated by lag times in producing battery modules for its electrical vehicles.
Tesla's stock was down 0.63% this year.
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