Elon Musk tapped more of his shares in Tesla last year to unlock some of his wealth and also entered into an unusual arrangement to personally provide liability coverage for the company’s board members.
Musk increased the share of his Tesla holding that he’s pledged as collateral for personal loans to 54 per cent at the end of 2019, the company disclosed in a regulatory filing on Tuesday. That compares with 40 per cent at the end of 2018, when the carmaker last shared the size of Musk’s pledging.
Tesla said in the filing that the company decided not to renew its directors’ and officers’ liability policy for 2019-2020 due to “disproportionately high” premiums quoted by insurers. Musk, 48, instead agreed to personally provide coverage for a year. The carmaker’s board concluded the arrangement with the chief executive officer would not impair the independent judgement of his fellow directors.
There’s an array of ongoing securities lawsuits involving Tesla, its board or Musk, including litigation relating to the 2016 acquisition of SolarCity, statements made regarding early production of the Model 3 sedan in 2017, and the performance award the board awarded the CEO in 2018.