The board of directors at Tesla has approved a new $29 billion stock award for CEO Elon Musk, a decision explicitly aimed at keeping him focused on the company. This comes after a US court invalidated his previous $56 billion pay package from 2018. The new award is a “good faith” payment, allowing Musk to purchase 96 million shares at the original 2018 price for $2 billion.
The decision was recommended by a special committee of the board, which included chair Robyn Denholm and director Kathleen Wilson-Thompson. In a letter to shareholders, they acknowledged concerns about Musk’s time being split between SpaceX, X, xAI, and his political activities. The directors believe that the new award will “incentivise Elon to remain at Tesla” and ensure his considerable “energies” are directed at the electric carmaker.
Musk’s political involvement, including his support for Donald Trump, has reportedly damaged the Tesla brand and sales. A survey from S&P Global Mobility revealed a significant and “unprecedented” drop in customer loyalty, with the percentage of repeat buyers falling sharply. This decline highlights the challenges the company faces, with its CEO’s public persona directly impacting business performance.
The new shares will increase Musk’s ownership stake from 13% to approximately 15%, giving him greater voting power. This is a key demand from Musk, who has said he needs more control to protect the company from activist shareholders as it pivots its strategy toward AI and robotics. The board’s letter confirms that the award is designed to gradually increase his influence, cementing his leadership for the company’s future. The new award is contingent on the original 2018 pay deal not being reinstated.