Tesla Grants CEO Elon Musk $29 Billion Pay Package in Landmark Decision

Tesla has announced a groundbreaking move, granting its CEO, Elon Musk, a staggering $29 billion pay package, consisting of 96 million shares of restricted stock. This decision, approved by Tesla’s board on Sunday, marks a dramatic reversal of a previous ruling by a Delaware court that had ordered the company to revoke Musk’s $56 billion pay package from 2018.

The new package comes just six months after the Delaware court’s ruling, which found that the original pay package was the result of “sham negotiations” with non-independent directors. Musk had appealed the decision in March, and in response, Tesla formed a special committee to review his compensation as CEO.

Analysts believe this new arrangement is a strategic move to ensure Musk remains at the helm of Tesla for the next several years, potentially until 2030. Wedbush Securities analyst Dan Ives noted that the grant would “remove an overhang on the stock” and motivate Musk to lead Tesla through a pivotal transition to an AI-first company.

However, the compensation package is not without its conditions. Musk must first pay Tesla $23.34 per share of restricted stock that vests, equal to the exercise price per share from the 2018 pay package. If the Delaware courts were to reinstate the original 2018 package, the $29 billion award would be immediately forfeited and returned to the company.

Tesla’s shares have faced significant challenges this year, with a 25% plunge largely attributed to investor concerns over Musk’s association with former President Donald Trump. Additionally, Tesla is grappling with fierce competition from both traditional automakers and Chinese EV manufacturers. In its most recent quarter, the company reported a sharp decline in profits, falling from $1.39 billion to $409 million, while revenue also dropped below expectations.

Under pressure from shareholders, Tesla has scheduled an annual shareholders meeting for November in compliance with Texas state law. A group of more than 20 shareholders expressed concerns about the company’s recent trajectory, particularly given Musk’s increased involvement in Washington, D.C., where he has become a prominent figure in the Trump administration, heading the Department of Government Efficiency (DOGE).

This development has sparked a broader debate about corporate governance, executive compensation, and the future of Tesla as a company. With Musk’s compensation now tied directly to the company’s performance and future direction, the eyes of investors and the public are closely watching how this new pay package will shape Tesla’s journey ahead.