In a major move to retain Elon Musk’s leadership during a pivotal shift in Tesla’s strategic direction, the company has granted the billionaire CEO a massive stock award worth $29 billion. The new share-based package is seen as an incentive to keep Musk focused on Tesla as it transitions from traditional electric vehicles to ambitious ventures in robotaxis and humanoid robotics.
Announced on Monday, the grant includes 96 million new shares, described by Tesla as a “good faith” interim award. This is intended to partially honor Musk’s original 2018 pay package, which was valued at over $50 billion but struck down by a Delaware court earlier this year.
Musk will only be eligible to claim the new shares if he remains in a top executive role for at least two more years and if the court does not reinstate the original 2018 deal, which is currently under appeal.
The shares will be available for purchase at $23.34 each—the same price as the 2018 award—and Musk must hold them for five years. If the original compensation plan is reinstated, the new shares will be forfeited to avoid any duplication of rewards.
Tesla’s board emphasized that the award reflects continued confidence in Musk’s leadership, especially during a period marked by falling sales, increased competition, and public scrutiny of Musk’s political endorsements and side ventures, including his AI startup xAI. The company stated that the new grant is meant to secure Musk’s commitment and leadership as Tesla refocuses its mission on autonomous vehicles and AI-driven innovations.
Despite facing criticism over brand loyalty due to Musk’s political alignment—particularly his endorsement of Donald Trump—Tesla maintains that Musk remains vital to the company’s future. Data from S&P Global Mobility revealed a decline in Tesla brand loyalty since that endorsement, yet Tesla continues to lead the EV market.
Critics, such as Charles Elson of the University of Delaware, argue that the new package undermines the court’s earlier ruling by repackaging the previously rejected compensation. However, Tesla shareholders seemed to respond positively, with shares rising nearly 2% after the announcement.
The company clarified that it won’t immediately record the package as a compensation expense, as the performance conditions aren’t yet deemed “probable.” However, that could change depending on Musk’s future role and the outcome of legal proceedings.
Musk’s stake in Tesla will increase from 12.7% to over 15% as a result of the award, further solidifying his position as the company’s largest shareholder. Despite the controversies, many investors and board members believe the move is necessary to ensure Tesla’s continuity and innovation under Musk’s leadership.
Tesla’s annual shareholder meeting on November 6 will also address a longer-term compensation plan for Musk, highlighting the board’s intent to retain him amid his many competing interests. While the move is polarizing, it underscores the enduring belief in Musk’s role as the visionary force behind Tesla’s remarkable 2,000% stock growth over the past decade.
