Elon Musk is poised to receive Tesla shares worth $29 billion, according to a decision by a special committee of the company’s board. The move is aimed at solidifying Musk’s commitment to Tesla after a court ruling blocked a previous $56 billion pay package.
The new award grants Musk 96 million restricted shares, subject to strict conditions, including remaining in a key executive role through 2027 and a mandatory five-year holding period—except in cases related to taxes or the share purchase price of $23.34 per share.
In a letter to shareholders, the special committee—composed of Tesla chairwoman Robyn Denholm and director Kathleen Wilson-Thompson—stated that the award would “incrementally” increase Musk’s voting rights, a factor both he and shareholders have described as essential to maintaining his focus on Tesla.
“While we recognise that Elon’s business ventures, interests and other potential demands on his time and attention are extensive and wide-ranging, we are confident that this award will incentivise Elon to remain at Tesla and focus his unmatched leadership abilities on further creating shareholder value for Tesla shareholders and attracting and retaining talent at Tesla,” the committee wrote.
The compensation plan comes amid ongoing legal battles over Musk’s prior pay deal. Earlier this year, Delaware judge Kathaleen McCormick struck down Musk’s 2018 compensation package—then the largest in U.S. corporate history—ruling it was “excessive” and that Tesla’s board had failed to provide appropriate oversight. Tesla is appealing the decision, which stemmed from a lawsuit brought by shareholder Richard Tornetta.
Because of the litigation, Musk is currently unable to access the shares from the 2018 package. The new award includes a clause that voids the interim package if courts later permit the original options to be exercised, effectively preventing a “double dip.”
The award comes at a critical juncture for Tesla, which is grappling with slowing sales and growing pressure from competitors in both China and the legacy automotive sector. Adding to the challenge are reduced U.S. government subsidies for electric vehicles, a result of tensions between Musk and President Trump following Musk’s brief leadership of the Department of Government Efficiency.
Despite a post-election surge, Tesla’s share price has fallen more than 20% since the beginning of the year. However, news of the new share award pushed Tesla stock up 2.3% to $309 in pre-market trading on Tuesday.
Musk has increasingly sought to pivot Tesla’s future beyond cars, touting the company’s ambitions in AI, autonomous vehicles, and robotics—particularly robotaxis and humanoid robots—as part of a long-term strategy to redefine Tesla as a technology powerhouse rather than a traditional automaker.
The board’s renewed commitment to Musk signals that, despite legal and market headwinds, Tesla is banking on its CEO’s vision—and presence—to drive the next phase of its evolution.
