Tesla awards Elon Musk $29 billion in shares after court blocks earlier $56 billion package, aiming to secure his leadership amid political controversy and falling sales [Image by PC Press]
(The Post News)- Tesla’s board awarded CEO Elon Musk a new $29 billion stock award after a Delaware court nullified a previous $56 billion pay package. The new deal, which awards Musk 96 million shares at the same $23.34 a-share as of the 2018 deal, is set to solidify his leadership while sales slow down, competition sharpens, and political controversies increase.
The reward was disclosed in a filing and letter by Tesla director Kathleen Wilson-Thompson and chair Robyn Denholm. They described the reward as a “good faith” effort to reward Musk for previous performance and re-motivate him for Tesla’s evolving mission.
“To recognize what Elon has done and the remarkable value he has brought to Tesla and to our shareholders, we believe that we ought to do everything we can to maintain the agreement we negotiated in 2018,” the directors said. “After all, ‘a deal is a deal.'”
Musk, the world’s wealthiest person with a net worth of $350 billion, according to Bloomberg, must serve as a senior executive for two years to become eligible for the full award. The shares must be retained for five years, and the package will be forfeited if the Delaware court reinstates the tainted 2018 award, which is under appeal.
The reward will take Musk’s Tesla stake from 13% to around 15% and secure his voting power as concerns over activist shareholder involvement stir. Tesla cited the reward as a strategic move to maintain Musk’s focus on the company’s shift away from its conventional electric vehicle (EV) business to fresh opportunities in robotaxis and humanoid robotics.
Musk’s management of Tesla has come into question after a rollercoaster year of declining sales, increased competition from China, and backlash over his political loyalty to U.S. President Donald Trump. Once a Trump backer, Musk has since become a critic of the president’s “big beautiful bill” tax-and-spending plan that phased out federal EV tax credits and hurt Tesla’s bottom line.
Musk’s political forays damaged Tesla’s brand. S&P Global Mobility data compiled and released to Reuters showed a dramatic drop in customer loyalty. Only 49.9% of the households in the market for a new vehicle in March who had a Tesla bought another Tesla, decreased from 73% in June 2024, albeit growing to 57.4% in May.
Tom Libby, an analyst at S&P Global, called the decline “unprecedented,” saying, “I’ve never seen this rapid a decline in such a short period of time.”
This despite the fact that some experts like Wedbush Securities’ Dan Ives believe that the new pay deal will be sufficient to convert at least some investors. “Musk is Tesla’s most valuable asset,” Ives said, and the elimination of doubt regarding executive pay may lift a weight off the shoulders of Tesla’s stock price. Stock rose more than 3% in early trading on the news, although it remains down nearly 20% year to date.
Tesla also will propose a longer-term CEO compensation plan for shareholders to approve at its Nov. 6 annual meeting.
While Musk splits his attention among ventures like SpaceX, X (formerly known as Twitter), Neuralink, and AI startup xAI, Tesla’s board asserts the new award is needed to keep him focused. “We believe this award will motivate Elon to stay at Tesla,” Denholm and Wilson-Thompson wrote.
Musk himself has already threatened to leave unless he is granted more control of the company. The new deal appears to answer that desire and is the board’s enduring belief that, all controversy and competition aside, Elon Musk is the key to Tesla’s future.
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