Tesla has awarded CEO Elon Musk a new stock compensation package worth approximately $29 billion, just months after a Delaware court invalidated a previous $56 billion deal that was the largest in corporate history.
In a regulatory filing on Monday, Tesla disclosed the board's approval of 96 million shares of restricted stock for Musk, conditional on an exercise price of $23.34 per share-the same terms as the contested 2018 package. The announcement followed a Sunday board vote and arrives amid mounting shareholder concerns over Musk's political activities and Tesla's weakening performance in its core business.
"We believe this grant will now keep Musk as CEO of Tesla at least until 2030 and removes an overhang on the stock," Wedbush Securities analyst Dan Ives said in a research note. Ives added the grant incentivizes Musk to lead Tesla through its "inflection point" as it pivots toward artificial intelligence and robotics.
Board members Robyn Denholm and Kathleen Wilson-Thompson defended the decision in a shareholder letter, writing: "Despite these legal challenges, we can all agree that Elon has delivered the transformative and unprecedented growth that was required to earn all milestones of the 2018 CEO Performance Award."
The court-voided 2018 package had faced legal opposition from a Tesla shareholder who alleged that Musk had "engineered" the plan through sham negotiations with directors who were not independent. In a December 2024 ruling, Delaware Chancellor Kathaleen St. Jude McCormick agreed and ordered the pay package rescinded. Musk's legal appeal is still pending.
Tesla has not indicated when the legal dispute may be resolved, but Monday's announcement appears to preemptively reinforce Musk's role at the company.
Musk receives no base salary or cash bonus. His compensation comes through multi-billion-dollar stock option awards, which he can purchase below market value. Musk currently owns roughly 13% of Tesla's shares.
Tesla shares have dropped 25% in 2025, pressured by Musk's political involvement-including his post as head of the Trump administration's Department of Government Efficiency-and backlash from customers and activists. President Donald Trump's policy agenda has also cut key electric vehicle tax incentives and regulatory credits, critical components of Tesla's revenue model.
Despite falling sales and missed revenue targets, Tesla continues to position itself as a tech company focused on autonomous driving and artificial intelligence. The company is currently rolling out a scaled-back version of its long-touted robotaxi service.
"Through Elon's unique vision and leadership, Tesla is transitioning from its role as a leader in the electric vehicle and renewable energy industries to grow towards becoming a leader in AI, robotics and related services," Denholm and Wilson-Thompson said.
