Executive Director of the SMU Corporate Governance Initiative Shane Goodwin reportedly stated on Tuesday that Elon Musk's new compensation package is the right plan for Tesla and its shareholders.

In a commentary piece published on Fortune, Goodwin, who served as a Governance Advisor to the Tesla Board's Special Committee on the development of Elon Musk's incentive compensation proposals, said that the proposed package wouldn't pay Musk based on promises but solely on creating value for shareholders.

“While headlines are focusing on the numbers, this plan focuses on real results for Tesla and its shareholders - sustained market capitalization milestones, staggering adjusted EBITDA hurdles, real-world product deployment and Elon remaining in a leadership role at the company and developing the next generation of leaders - for Elon to get paid and receive any additional voting influence over Tesla's strategic direction,” Goodwin wrote.

Furthermore, Tesla's board believes that Elon's leadership is crucial for the company's next phase of growth, focusing on artificial intelligence, robotics, and securing top talent to achieve these objectives, he noted.“In an era when executive compensation philosophy is often criticized for rewarding mediocre performance or short-term thinking at the expense of long-term strategy, Tesla's approach stands out for its rigor and emphasis on accountability,” Goodwin wrote.

According to him, the package would increase Musk's voting power to retain him in the company, but not so much that fellow shareholders cannot overturn him.

On Stocktwits, retail sentiment around TSLA stock stayed within the 'bearish' territory over the past 24 hours, while message volume fell from 'normal' to 'low' levels.

Tesla proposed a new compensation package for Musk valued at about $1 trillion in September. According to the new pay plan, Musk will receive no salary but will be awarded up to 423.7 million shares of Tesla in installments over 10 years when the company meets certain milestones, including an increase in earnings, vehicle deliveries, robotaxis, and humanoid robots.

The new package is designed to deliver approximately 12% more voting power to Musk in exchange for driving performance growth, including by taking the company's total market capitalization to $8.5 trillion. Tesla shareholders must now approve the package.

Musk's previous pay package, initially approved in 2018 and valued at over $50 billion, was voided by a Delaware court, which deemed it excessive, last year. Musk appealed the court's order in March, and Tesla established a special committee to consider matters concerning Musk's pay, including evaluating a new pay package.

TSLA stock is up by about 7% this year and has nearly doubled over the past 12 months. 

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