Tesla Approves $29B Stock Award for Elon Musk to Secure Leadership Through 2027

Tesla Inc. has approved a restricted stock award for CEO Elon Musk, granting him 96 million shares valued at approximately $29 billion, in a move to secure his continued leadership at the company[1][2][3]. The shares will vest on the second anniversary of August 3, 2025, provided Musk remains in his role as CEO or executive officer[1][2][3]. The structure of the award mirrors the 2018 compensation package that was invalidated by a Delaware court in 2024, which ruled the previous arrangement lacked sufficient board independence and unfairly benefited Musk at the expense of shareholders[1].

The Tesla board’s special committee emphasized that the grant is intended to align Musk’s interests with long-term value creation and to support the company’s strategic objectives, including its pivot toward AI, robotics, and autonomous driving[1][2][3]. The board also noted that Musk’s continued presence is critical as Tesla moves into uncharted product categories such as robotaxis and humanoid robots[1]. The grant will gradually increase Musk’s voting power, reinforcing his influence without requiring him to purchase additional shares on the open market[1].

This compensation package is the latest in a series of high-profile measures taken by Tesla to retain its founder and chief executive. Wedbush analyst Dan Ives has forecast that Musk will likely remain in his role until at least 2030[4], underscoring the strategic importance of leadership stability in the fast-evolving EV and tech landscape. The board’s decision also reflects broader corporate governance trends, where high-value executive compensation is increasingly used to retain key talent in competitive industries[1][2][3].

Tesla’s stock rose more than 2% in premarket trading following the announcement[1]. However, the company continues to face headwinds in its core markets. In China, Tesla’s sales from its Shanghai plant have declined for six of the first seven months of 2025, with July shipments dropping 8.4% year-on-year to 67,886 units[1]. The company is facing stiff competition from local rivals like BYD and Xiaomi, which recently launched the YU7, a direct competitor to Tesla’s Model Y[1]. While the broader Chinese EV market is growing—sales and hybrid units surged 25% in July to 1.18 million—Tesla’s market share is shrinking[1].

Globally, Tesla is also dealing with weaker demand, partly attributed to Musk’s public political statements and controversial behavior, which have alienated some consumers in key markets like the U.S. and Europe[1]. The company’s Q2 earnings reflected these challenges, signaling the need for a renewed focus on both product innovation and brand alignment[1].

The $29 billion stock award underscores Tesla’s confidence in Musk’s ability to drive the company forward amid intense competition and shifting market dynamics[1][2][3]. Investors will be closely watching how the move impacts shareholder sentiment, corporate governance perceptions, and the company’s long-term trajectory[1][2][3].

Sources:

[1] Tesla proposes $29B comp package for Elon Musk amid '... (https://techcrunch.com/2025/08/04/tesla-asks-shareholders-to-approve-29b-comp-package-for-elon-musk-amid-ai-talent-war/)

[2] Tesla approves share award worth US$29b to Musk (https://theedgemalaysia.com/node/765220)

[3] Tesla Approves 96M Shares Of Restricted Stock Worth $29 ... (https://newsable.asianetnews.com/markets/tesla-approves-96m-shares-of-restricted-stock-worth-29b-to-ceo-elon-musk-articleshow-g7kmp5v)

[4] Wedbush Analyst Dan Ives Thinks Elon Musk Will Likely ... (https://stocktwits.com/news-articles/markets/equity/dan-ives-thinkgs-elon-musk-will-likely-stay-as-tesla-ceo-until-2030/chrXS2QRdTX)