A “Critical First Step”: Tesla Board Awards Musk $29B to Secure His Focus

The board of directors at Tesla has awarded CEO Elon Musk a new compensation package valued at $29 billion in shares. This move is a direct response to a US court voiding his original $56 billion pay deal from 2018. The award, described as a “good faith” payment, is meant to “honour the bargain” and ensure Musk’s continued commitment. Musk will pay $2 billion to acquire 96 million shares at the original 2018 price.
In a letter to shareholders, board members Robyn Denholm and Kathleen Wilson-Thompson stated that the award is a “critical first step” toward “keeping Elon’s energies focused on Tesla.” They acknowledged reviewing shareholder concerns about his divided attention, noting his multiple ventures like SpaceX, X, and xAI, as well as his increasing political involvement.
Musk’s political activities, particularly his support for Donald Trump, have reportedly had a negative impact on the Tesla brand and sales. A survey from S&P Global Mobility showed a dramatic and “unprecedented” drop in customer loyalty, with the percentage of repeat buyers falling sharply before a slight rebound. This data highlights the challenges the company faces due to its CEO’s public persona.
With the new shares, Musk’s ownership stake will increase from 13% to about 15%, giving him greater voting power. Musk has long argued that more control is necessary to protect the company from activist shareholders as it pivots its strategy toward robotaxis and humanoid robots. The board’s letter confirms that the award is designed to gradually increase his influence, cementing his long-term leadership. The new award is contingent on the original 2018 pay deal not being reinstated.