Elon Musk Receives $29B Compensation Package Amid AI Talent War

Tesla's board has approved a new compensation package for CEO Elon Musk worth $29 billion in shares, citing the "AI talent war" and the company's critical inflection point. The pay package is allocated through a 2019 Equity Incentive Plan and will vest in two years, provided Musk continues in a senior leadership role at Tesla and holds the stock for five years. The package is voided if the Delaware Supreme Court overturns a judge's decision to strike down Musk's 2018 compensation package.

Tesla's board of directors has approved a new compensation package for CEO Elon Musk, worth approximately $29 billion in shares. The package, which is part of the 2019 Equity Incentive Plan, will vest in two years provided Musk remains in a senior leadership role at Tesla and holds the stock for five years [1]. This move comes as Tesla faces intense competition in the AI talent market and a critical inflection point in its operations.

The new compensation package includes a grant of 96 million shares, valued at around $23.34 per share, with an accounting fair value of about $23.7 billion. Musk will be required to pay Tesla $23.34 per share of restricted stock that vests. The package is contingent upon Musk's continuous service as a senior leader at Tesla and the holding of the stock for five years. If the Delaware Supreme Court overturns a previous judge's decision to strike down Musk's 2018 compensation package, the new package will be voided to prevent any "double dip" [1].

The decision to approve the new package follows a special committee formed by the board earlier this year. The committee, consisting of chairwoman Robyn Denholm and board member Kathleen Wilson-Thompson, was tasked with addressing Musk's compensation. The committee's decision aims to retain Musk's leadership and align with Tesla's long-term strategic goals [2].

This move by Tesla is seen as a strategic move to keep Musk at the helm of the company amidst the ongoing AI talent war and to ensure stability for the stock. Analysts have noted that Musk's compensation package was a significant concern for shareholders and that this new package addresses those concerns [1].

The new compensation package will be subject to a vote at Tesla's annual shareholder meeting scheduled for November. Musk and his brother Kimbal, who is also a board member, recused themselves from the process of constructing the new compensation package to avoid conflicts of interest [2].

References:
[1] https://finance.yahoo.com/news/musk-pay-package-removes-overhang-124453279.html
[2] https://techcrunch.com/2025/08/04/tesla-hands-29b-comp-package-to-elon-musk-amid-ai-talent-war/