Around the time that Tesla’s board of directors granted founder and CEO Elon Musk a massive 10-year, $2.3 billion expected equity award in 2018, a small number of companies offered similar one-time “mega grants” to their CEOs (deemed “copycat” or “metoo” grants). Most of these were in emergent industries (such as technology and biotechnology), although established companies in more traditional mainline industries also offered mega grants to their CEOs.
The disclosure justifying these compensation decisions is fairly anodyne, containing boilerplate language that is mostly indistinguishable from the standard language used in proxy statements to explain typical CEO structures. These grants were intended to provide “incentive” to achieve corporate objectives, encourage “superior, long-term performance,” and “align the interests” of the CEO with shareholders (generally by rewarding stock-price appreciation).
