Tesla Awards Elon Musk 29 Billion in Interim Stock Compensation Following Court Ruling

Tesla Inc. has announced a new interim compensation package for Chief Executive Officer Elon Musk, awarding him 96 million restricted stock units (RSUs) valued at approximately $29 billion. This follows a recent court ruling that invalidated Musk’s 2018 pay package, which had a potential maximum value of $56 billion [1]. The decision by Tesla’s board reflects a temporary arrangement while the legal review of the original agreement continues [2].

The new award requires Musk to pay $23.34 per share of restricted stock that vests, matching the exercise price per share under the 2018 package. The board emphasized that the interim award is a “good faith” measure to ensure Musk’s leadership during the ongoing legal proceedings [3]. The terms of the package, including vesting schedules and performance metrics, have not yet been disclosed in detail [4].

The 2018 compensation package was initially approved by Tesla shareholders but later challenged in a lawsuit filed by a Tesla stockholder. In February 2025, Delaware Chancellor Kathaleen St. Jude McCormick ruled that the original deal lacked independent director oversight and must be revoked [1]. The company has since formed a special committee to reevaluate Musk’s compensation structure in light of the ruling.

The interim award has reignited discussions about executive pay at Tesla, especially considering the company’s recent stock performance and governance concerns. Despite the drop in Tesla’s stock by 25% this year, analysts have noted that the new package remains one of the largest in corporate history [5]. Investors have expressed growing concerns over the trajectory of the company, particularly as Musk has spent significant time engaging with U.S. government affairs.

Tesla shares saw a more than 2% increase following the announcement, reflecting market optimism about the board’s decision. However, the broader stock market has been affected by Tesla’s recent financial performance, including a sharp decline in quarterly profits from $1.39 billion to $409 million [6]. The company also reported revenue shortfalls, falling below even the lowered expectations of Wall Street analysts.

The interim compensation structure does not replace the original 2018 agreement but serves as a placeholder while Tesla navigates the court process. Legal experts suggest that the final outcome will depend on whether the new package addresses the court’s concerns regarding transparency and shareholder approval [8]. Tesla shareholders have also been pushing for more accountability, with over 20 shareholders requesting public notice for the upcoming annual meeting in November [7].

The decision underscores Musk’s central role in shaping Tesla’s strategic direction and maintaining its position in the highly competitive automotive and technology sectors. While critics continue to question the fairness of the arrangement, supporters argue that Musk’s leadership has been key to Tesla’s innovation and market dominance [9].

[1] Source: [1]title1 (https://fortune.com/2025/08/04/elon-musk-compensation-29-billion-tesla/)

[2] Source: [2]title2 (https://www.bloomberg.com/news/articles/2025-08-04/tesla-approves-interim-stock-award-for-musk-ahead-of-pay-vote)

[3] Source: [3]title3 (https://www.nytimes.com/spotlight/elon-musk)

[4] Source: [4]title4 (https://www.investors.com/market-trend/stock-market-today-dow-jones-futures-rise-tesla-rewards-elon-musk-palantir-amd-earnings/)

[5] Source: [5]title5 (https://www.businessinsider.com/)

[6] Source: [6]title6 (https://www.marketwatch.com/livecoverage/stock-markets-today-dow-s-p-500-and-nasdaq-set-to-rebound-from-friday-s-selloff)

[7] Source: [7]title7 (https://www.yahoo.com/quote/TSLA/news)

[8] Source: [8]title8 (https://www.ncnewsonline.com/news/national/ap-business-summarybrief-at-8-14-a-m-edt/article_a4894c03-763f-5243-9e98-ecfa9c459d2a.html)

[9] Source: [9]title9 (https://www.reddit.com/r/worldnews/comments/1mhci42/tesla_awards_boss_elon_musk_29bn_in_shares/)