Tesla announced that it has awarded CEO Elon Musk a new stock award worth approximately $29 billion. According to the company’s announcement, Musk has been allocated a total of 96 million Tesla shares. This step is intended to ensure Musk maintains his leadership at Tesla.
Tesla Awards Elon Musk a Stock Award
The company also highlighted the ongoing court proceedings regarding his salary package, stating that the new stock award is designed to strengthen Musk’s commitment to the company.
In a case heard in Delaware in 2024, the court vacated Musk’s 2018 pay package, worth over $50 billion. The reasoning behind the decision was that Tesla’s board of directors failed to act fairly towards shareholders in approving the award. Elon Musk appealed the decision in March. Arguing that the lower court made numerous legal errors, he requested the higher court overturn the decision.
The newly announced $29 billion stock award was awarded amidst this litigation. Tesla announced earlier this year that it had established a special committee to reevaluate Musk’s compensation and bonus system. The committee’s decision to implement the new package is designed to increase Musk’s voting power at Tesla over time. According to the company, this structure aims to incentivize Musk to continue his role at Tesla.
According to the terms, Musk will only receive the new stock award if he remains in a key management role at Tesla until 2027. Shares covered by the award cannot be sold until August 3, 2030, except for tax payments or to cover the purchase price.
Musk will pay $23.34 for each share. If all conditions are met, Musk’s total Tesla stock holdings will reach 506 million shares, equivalent to over $153 billion in current market value.
In a letter to shareholders, the committee reminded them that Musk has not received any meaningful compensation in the past eight years and that the canceled 2018 package is still in effect. The statement noted that Musk had delivered an extraordinary return to Tesla shareholders during this period.
Another noteworthy clause in the bonus package was that if the $50 billion performance award, which was canceled in 2018, were legally enforced, the new stock award would be canceled. This eliminated the possibility of a double payment.
