Tesla grants Elon Musk a record-breaking $29 billion compensation package.
Tesla Grants Elon Musk New Compensation Package Amid Legal Controversy
In a move to retain the visionary leadership of Elon Musk, Tesla's board has approved a new interim compensation award for the tech mogul, worth approximately $24 to $29 billion in stock. This decision comes amidst ongoing legal battles over Musk's 2018 pay package, which has been struck down twice by a Delaware court.
The new award, granted as a "good faith" effort to keep Musk focused on Tesla, consists of 96 million shares, each trading at around $300. This equates to a total value of $30 billion, making it a substantial replacement plan while the appeal of the 2018 package proceeds.
The 2018 pay package, initially valued at about $86.9 billion, has been a subject of contention due to concerns over shareholder disclosure and conflicts of interest. The Delaware court rejected the performance award following a shareholder lawsuit, and Musk is currently appealing the order.
Despite the legal challenges, Tesla's board members, Robyn Denholm and Kathleen Wilson-Thompson, have stated in a letter to shareholders that Musk has not received meaningful compensation for eight years. This new award aims to address this gap, while also aligning Musk's interests with those of the shareholders.
Musk's focus on AI and robotics is evident in Tesla's current initiatives. The company is rolling out its robotaxi service, albeit in a slimmed-down fashion, as it pivots towards these areas. The stock rose nearly 3% in premarket trading following the announcement of the new compensation package.
However, Tesla has faced challenges in other areas. Sales have been falling sharply, and the company relies heavily on regulatory credits from other automakers for a significant portion of its revenue. Additionally, President Donald Trump's domestic policy agenda has stripped Tesla and other EV makers of tax incentives for vehicle sales.
Musk's involvement in politics last year and earlier in 2025, including spending large sums of money and time to support Republican candidates, caused controversy among some shareholders. The impact of his political activities on Tesla was mixed, with some arguing that they diverted his attention from the company.
Despite these challenges, Musk has recently stated that he would return to his companies full time. His unique vision and leadership are seen as crucial in transitioning Tesla towards becoming a leader in AI, robotics, and related services.
The legal efforts to reinstate the 2018 pay package continue, with a clear timeline for resolution. Musk's compensation at Tesla takes an unconventional form, with the tech mogul receiving lucrative stock option packages instead of a cash salary or bonus. As Tesla's largest individual shareholder, owning about 13% of the company, Musk's continued engagement is crucial for the company's future.
- Elon Musk's new compensation package, worth approximately $24 to $29 billion in stock, is designed to keep him focused on Tesla's business, especially in areas like AI and robotics, which are aligned with shareholders' interests.
- Despite legal challenges surrounding the 2018 pay package, Tesla's business ventures in finance, such as the emerging robotaxi service, remain vital, partly funded by revenue derived from regulatory credits in the automotive industry and Trump's domestic policy changes.
