The Man Gets Paid And Stays! Tesla Grants Elon Musk $30 Billion Stock Award To Keep Him At The Helm

Tesla has approved an interim stock award worth approximately $30 billion for CEO Elon Musk, a move designed to ensure the billionaire remains focused on the automaker as legal disputes over his 2018 compensation package remain unresolved.

In a regulatory filing on Monday, Tesla stated that the new agreement includes 96 million company shares, which will vest if Musk continues as CEO over the next two years. The restricted stock carries an exercise price of $23.34, matching the terms of the 2018 compensation plan.  

Tesla shares rose as much as 2.9% in premarket trading on Monday. As of Friday's close, the stock had declined 25% year-to-date, while the S&P 500 gained 6% over the same period.  

The board emphasized the importance of retaining Musk, describing the award in a letter to shareholders as a "good faith" initial payment. "After all, 'a deal is a deal,'" the board said, adding that it will submit a longer-term CEO compensation strategy for a vote at Tesla's annual shareholder meeting on November 6.  

The decision follows a Delaware Chancery Court ruling that invalidated Musk's previous $50 billion-plus compensation package following a shareholder lawsuit. The ruling is currently under appeal, and a special board committee—comprising Chair Robyn Denholm and board member Kathleen Wilson-Thompson—has been exploring new compensation arrangements since Tesla reincorporated in Texas last year.  

The board argued that action was necessary given the unresolved legal challenges and Tesla's critical juncture amid an intensifying "war for AI talent." The award requires Musk to maintain a senior leadership role at Tesla throughout the two-year vesting period and hold the shares for five years from the grant date. If the Delaware court fully reinstates the 2018 performance award, Musk must forfeit or repay the interim grant. The filing explicitly states: "To put it simply, there can be no 'double dip.'"  

The board noted that shareholders had previously approved large stock awards for Musk and stressed the need to retain leadership as Tesla expands from automotive and energy into AI and robotics.

"We believe it directly addresses a top concern and priority for shareholders and the Board alike: energizing and focusing Elon on Tesla so he can propel Tesla into its next era of growth, while we continue the legal campaign to have the 2018 CEO Performance Award reinstated," the letter stated.  

The proposal underscores Musk's influence over Tesla and likely ensures he retains the CEO title in the near term. Musk, who has led the automaker since 2008, told Bloomberg in May that he expects to remain at the helm for at least five more years.  

Despite Musk's numerous commitments, the board remains steadfast in its support. Beyond overseeing four other companies, Musk has devoted significant time to political activities this year—funding former President Donald Trump's reelection campaign and spearheading the "Project Doogee" initiative to reshape federal governance, which has drawn backlash against Tesla.  

"While we recognize that Elon's business ventures, interests and other potential demands on his time and attention are extensive and wide-ranging, including his leadership roles at xAI, SpaceX, Neuralink, X Corp., and the Boring Co. as well as his other interests, we are confident that this award will incentivize Elon to remain at Tesla," the board said in its letter. "To be clear, losing Elon would not only mean the loss of his talents but also the loss of a leader who is a magnet for hiring and retaining talent at Tesla."