Elon Musk Secures £22 Billion in Tesla Shares to Stay on as CEO

Tesla has granted CEO Elon Musk 96 million shares worth £22.3 billion to keep him at the company. The shares are part of a pay deal, but Musk must pay the company $23.34 a share, about £1.7 billion. The deal aims to retain Musk, the firm's most important asset, and attract new talent as Tesla shifts towards AI and self-driving robo-taxis.

Tesla (TSLA) has granted CEO Elon Musk 96 million shares valued at £22.3 billion, part of a compensation package designed to retain Musk's leadership while the company navigates legal battles and strategic shifts [1]. The shares, granted on July 24, 2025, are subject to vesting conditions and a mandatory holding period, aligning Musk's interests with those of shareholders [1].

Under the new deal, Musk will receive 96 million Tesla shares at the price of $23.34 per share, totaling approximately £1.7 billion in payments upon vesting [1]. The shares vest only if Musk remains in a key executive role through August 3, 2027, as CEO or an executive officer responsible for product development or operations [1]. If the Delaware Supreme Court overturns the Delaware Chancery Court’s decision to invalidate Musk's original 2018 compensation plan, the shares granted under the new plan must be forfeited [1].

The new compensation plan aims to address the ongoing legal battle over Musk's 2018 pay package, which was struck down by a Delaware judge due to perceived undue influence by Musk on the board and lack of fairness to shareholders [1]. Tesla shareholders reapproved the plan in June 2024, but the court upheld the voiding in a subsequent ruling [1]. Musk launched an appeal in March 2025, arguing multiple legal errors by the judge [1].

Tesla's board believes the new compensation plan is necessary to retain Musk amid his extensive commitments, including SpaceX, xAI, Neuralink, and political activities [1]. Musk, Tesla's largest shareholder with a 13% stake, has not received meaningful compensation since 2016 under the performance-based 2018 deal [1]. The deal aims to retain Musk, the firm's most important asset, and attract new talent as Tesla shifts towards AI and self-driving robo-taxis [1].

References:
[1] https://finance.yahoo.com/news/tesla-board-approves-30-billion-alternative-pay-deal-for-musk-133123540.html
[2] https://centralnews.co.za/tesla-grants-elon-musk-29-billion-in-shares-as-interim-pay-deal-amid-legal-battle-and-pivotal-shift-to-ai-and-robotics/