Tesla has awarded CEO Elon Musk a share package valued at $29 billion (£21.7 billion), aiming to retain his leadership at a time when the company faces heightened competition and legal uncertainty.
This decision follows a 2024 ruling by a Delaware court that invalidated Musk’s previous compensation deal from 2018—originally worth over $50 billion—on the grounds that it was unfair to shareholders. Musk is currently appealing the decision, and Tesla recently expressed confidence in its new share grant, emphasizing that it would help ensure Musk’s continued commitment, especially as the competition for top talent in artificial intelligence heats up.
The new equity award could strengthen Musk’s influence on Tesla’s board by increasing his voting power.
Tesla’s board stated via X (formerly Twitter), a platform owned by Musk, that retaining top-tier talent, starting with Musk himself, is essential. They praised his unmatched leadership and technical abilities and highlighted his successful track record of building innovative, profitable ventures.
The company clarified that if the Delaware court ultimately reinstates the original 2018 pay package, Musk would return or forfeit the new shares to prevent receiving both awards.
Tesla still supports the reinstatement of the original $56 billion pay deal, which would be the largest compensation package in corporate American history. That agreement was structured around performance milestones related to Tesla’s market value, sales, and profitability—targets that Musk ultimately met.
In his appeal, Musk argues the court erred in its legal reasoning when it struck down the earlier deal. He has also maintained that compensation should be decided by shareholders rather than the courts.
The new share package comes at a time when major tech firms are aggressively recruiting AI talent. Meta’s CEO Mark Zuckerberg has reportedly attempted to hire leading developers from OpenAI, offering lucrative compensation. Meanwhile, Microsoft’s AI group, led by former DeepMind co-founder Mustafa Suleyman, has successfully recruited several engineers from Google.
Tesla believes it is at a pivotal stage as it evolves from a purely electric vehicle manufacturer into a company focused on AI and robotics. The firm views Musk’s leadership as critical during this transition, especially considering his commitments to other ventures.
In addition to Tesla, Musk currently holds executive roles at companies such as xAI, Neuralink, and The Boring Company. Recently, he indicated that he would be reducing his involvement in political matters, following a period of advising former U.S. President Donald Trump.
ALSO READ : Retailers Back NDS2 with Push for Informal Sector Formalisation
