Tesla has granted Elon Musk a $29 billion share award as part of a new compensation plan to retain him as CEO while the company shifts focus from electric cars to robotaxis and AI. The move revives elements of a controversial 2018 package previously struck down by a Delaware court.
Tesla referred to the new award as a 'good faith' gesture, with a more permanent compensation plan set for shareholder vote on 6 November.
Musk, who owns about 13% of Tesla, is expected to receive the shares only if he remains in a key executive role through 2027.
The stock has a five-year holding requirement, aside from coverage for taxes or the $23.34 per share purchase cost, the same as the 2018 award’s exercise price.
The company’s special compensation committee, made up of board chair Robyn Denholm and independent director Kathleen Wilson-Thompson, stated that while Musk has many outside ventures, this award is crucial to keeping him engaged in Tesla's long-term mission.
"We are confident this award will incentivize Elon to remain at Tesla," the committee said.
Supporters argue the move restores confidence in Musk’s continued leadership. Tesla investor Gary Black noted on X that the award aligns Musk’s incentives with shareholders and eases fears about him stepping down.
Despite a 2,000% gain in Tesla shares over the past decade, the stock has lost about 25% this year during slowing EV sales, an aging lineup, and U.S. subsidy cuts.
Analysts forecast another year of declining sales in 2025, following a slump last year.
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