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Tesla has awarded its chief executive Elon Musk a massive $29 billion (£21.7 billion) in company shares, aiming to secure his continued leadership at a critical time for the firm.
The move follows a decision by a U.S. court earlier this year that struck down Musk’s previous 2018 compensation package—originally valued at over $50 billion—deeming it “unfair to shareholders.” Musk is currently appealing the Delaware court’s 2024 ruling, and Tesla has told shareholders it remains “confident” that the new $29 billion share award “will incentivize Elon to remain at Tesla,” particularly as competition for top talent in artificial intelligence intensifies.
Tesla’s board said the new award would enhance Musk’s voting power within the company. In a post shared on X, the social media platform owned by Musk, the board wrote: “It is imperative to retain and motivate our extraordinary talent, beginning with Elon,” emphasizing that “no one matches Elon’s remarkable combination of leadership experience and technical expertise.”
The company described Musk as having a “proven track record” of building both revolutionary and profitable enterprises.
Importantly, Tesla stated that if the Delaware court reinstates Musk’s original 2018 compensation package, he would either forfeit or return the newly granted shares to avoid what the company referred to as a “double dip.”
Tesla’s board made clear its desire for the court to uphold the original $56 billion deal—an unprecedented sum that would mark the largest pay package in corporate U.S. history. That deal had been tied to performance metrics including increases in Tesla’s market value, revenue, and underlying profitability. Musk achieved the stipulated milestones, which triggered the full payout under the plan.
Musk’s appeal argues the Delaware court erred in law when it overturned the pay package. He has repeatedly said that executive compensation should be left to the company’s shareholders to decide.
Dan Ives, a prominent analyst from Wedbush Securities, told the BBC the latest move by Tesla’s board is essential. “This is what they need to do to keep him [Musk] at the firm,” Ives said. “The biggest asset for Tesla is Musk. The board needs to do this, and I believe it’s a huge step forward.”
Ives added that in the midst of the escalating “AI arms race,” Tesla cannot afford to have Musk only “semi-committed” to the company’s goals.
The push for AI talent across the tech sector has seen major firms offering enormous compensation to lure experts from rival companies. Facebook founder Mark Zuckerberg has reportedly attempted to attract top developers from OpenAI—the creator of ChatGPT—by offering million-dollar salaries.
Microsoft has also stepped up its AI efforts. Its division, now led by former Google DeepMind co-founder Mustafa Suleyman, recently attracted several key hires away from Google.
Tesla emphasized that it stands at an “inflection point” as it shifts from being a purely electric vehicle company to one focused on artificial intelligence and robotics. The board said Musk’s expertise is critical during this transformative period.
The company further noted that the new share package is designed to appeal to Musk in light of the many “demands on his time and attention.”
Beyond Tesla, Musk holds executive positions at several other ventures, including xAI, Neuralink, and The Boring Company, which specializes in infrastructure and tunnel construction across the U.S.
Most recently, Musk announced he was stepping away from political involvement after previously serving as an adviser to former U.S. President Donald Trump.
