Musk Granted $29B Pay Package as Tesla Board Unanimously Votes

Tesla’s board has unanimously approved a new $29 billion compensation package for CEO Elon Musk, granting him 96 million restricted shares to be vested over two years. The landmark decision underscores the company’s renewed reliance on Musk’s leadership as Tesla undergoes a dramatic business transformation.

The board’s vote came on the heels of a special committee recommendation, with Tesla emphasizing the award as a strategic move to retain and motivate Musk amid fierce competition for AI and robotics talent.

The $29 billion value is based on current market prices for Tesla shares, each valued at about $302. Musk must remain in a senior leadership role to see the shares vest.

Legal Hurdles Shape the Pay Package

The award’s unveiling follows a high-profile legal battle. Delaware Chancellor Kathaleen McCormick twice struck down Musk’s 2018 pay package originally worth over $50 billion, citing conflicts of interest and flawed approval by the board.

Despite a shareholder vote to reinstate the plan, McCormick’s ruling in December 2024 called the board’s processes deeply flawed, increasing pressure for new terms.

Tesla’s latest SEC filing details that the new package prevents “double compensation.” Should the Delaware Supreme Court overturn the initial ruling and reinstate Musk's 2018 package on appeal, they would forfeit the fresh award. The same $23.34 per share exercise price applies, echoing the original arrangement.

Did you know?
Elon Musk’s 2018 Tesla compensation package was the largest ever awarded to a CEO, valued at over $50 billion, but was twice voided by a single judge in Delaware Chancery Court.

Strategic Shift to Artificial Intelligence

The timing of the pay decision highlights Tesla’s evolving vision. Board chair Robyn Denholm and committee member Kathleen Wilson-Thompson called the plan essential to safeguard Musk’s motivation as Tesla pivots from affordable electric vehicles toward robotics and advanced AI, including developments in robotaxi fleets and humanoid robots.

Musk’s tenure has seen Tesla’s value surge from $53.7 billion to several hundred billion dollars. The board claims his involvement is more crucial than ever as Tesla seeks to compete in the global AI “talent war.”

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Shareholder Response and Market Impact

Following the announcement, Tesla shares gained about 2% in pre-market activity. However, the company still faces broader volatility from competition in electric vehicles and fluctuations in technology stocks.

Tesla hopes this award will remove uncertainty around leadership as Musk also pursues ventures like xAI. Investors remain divided, with some praising the strategic focus and others questioning the size and timing given recent legal turbulence and operational headwinds.

The board’s latest move signals Tesla’s commitment to Musk and to rewriting its role in the next generation of mobility and artificial intelligence. As legal appeals continue, the outcome could reverberate across corporate governance and executive pay standards for years to come.