Tesla is granting CEO Elon Musk shares totaling around $29 billion, the company announced Monday.
The new pay package for the tech billionaire, which consists of 96 million shares of restricted stock, was approved by the Tesla board on Sunday, the company said in a regulatory filing.
The award comes just six months after a Delaware judge ordered the company to revoke his $56 billion pay package from 2018.
Musk appealed the order in March. A month later, Tesla said in a regulatory filing that it was creating a special committee to look at Musk’s compensation as CEO. Creating this new compensation will ensure Musk stays as CEO of Tesla for next several years and alleviate some Tesla shareholder concerns, according to Wedbush analyst Dan Ives.
“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. The grant will motivate Musk to lead the company through an “inflection point,” as Tesla transitions to an AI-first company, he added.
Equal to 2018 pay package
The electric vehicle maker said in a regulatory filing on Monday that Musk must first pay Tesla $23.34 per share of restricted stock that vests, which is equal to the exercise price per share of the 2018 pay package that was awarded to the company’s CEO.
After that pay package was initially approved, a Tesla stockholder challenged it in a lawsuit, leading to a legal showdown.
In a December 2024 ruling, Delaware Chancellor Kathaleen St. Jude McCormick reaffirmed an earlier ruling that Tesla must revoke Musk’s multibillion-dollar pay package. She found that Musk engineered the landmark pay package in sham negotiations with directors who were not independent.
At the time McCormick also rejected an equally unprecedented and massive fee request by plaintiff attorneys, who argued that they were entitled to legal fees in the form of Tesla stock valued at more than $5 billion. The judge said the attorneys were entitled to a fee award of $345 million.
According to the regulatory filing, if the Delaware courts reinstate Musk’s 2018 pay package, the $29 billion award would be “immediately forfeited and returned to the Company.”
Tesla stock troubles
Tesla shares have plunged 25% this year, largely due to blowback over Musk’s affiliation with President Donald Trump. But Tesla also faces intensifying competition from both the big Detroit automakers, and from China.
In its most recent quarter, Tesla reported that quarterly profits plunged from $1.39 billion to $409 million. Revenue also plummeted and the company fell short of even lowered expectations on Wall Street.
Under pressure from shareholders last month, Tesla scheduled an annual shareholders meeting for November to comply with Texas state law.
A group of more than 20 Tesla shareholders, which have watched Tesla shares plummet, said in a letter to the company that it needed to at least provide public notice of the annual meeting.
Investors have grown increasingly worried about the trajectory of the company after Musk had spent so much time in Washington this year, becoming one of the most prominent officials in the Trump administration as the head of the Department of Government Government Efficiency, or DOGE, overseeing mass federal layoffs.
