Tesla’s Board Grants Musk $29B to Re-Center His Attention on the Company

In a significant development, Tesla’s board has approved a new $29 billion stock award for CEO Elon Musk. This decision follows a U.S. court’s invalidation of his prior pay package. A letter to shareholders from the board acknowledged concerns about Musk’s political activities and divided focus, positioning the new award as a proactive measure to tackle these issues. The award is a “good faith” payment, allowing Musk to purchase 96 million shares at the 2018 price for $2 billion.
A special committee, including chair Robyn Denholm and director Kathleen Wilson-Thompson, recommended the package, describing it as a “critical first step” to “keeping Elon’s energies focused on Tesla.” The board’s logic is that this new compensation will serve as a powerful incentive for Musk to remain with the company and secure his long-term commitment.
The company’s brand has reportedly suffered, with Musk’s political endorsements and his connection to Donald Trump affecting both its reputation and sales. A survey by S&P Global Mobility indicated a stark drop in customer loyalty, with the number of repeat buyers falling sharply. One analyst characterized the decline as “unprecedented,” pointing to the major challenges the company faces due to its CEO’s public behavior.
The new stock will boost Musk’s ownership stake from 13% to roughly 15%, giving him more voting power. Musk has consistently argued that he requires greater control to safeguard the company from activist shareholders as it pivots its strategy toward AI and robotics. The board’s letter confirms that the award is intended to gradually increase his influence, ensuring his leadership. The new compensation package will be canceled if the original 2018 deal is reinstated.