Tesla has approved a massive new compensation package for CEO Elon Musk worth approximately $29 billion in stock options, designed to retain his leadership as the company shifts focus from its slumping auto business to robotaxis and artificial intelligence. The interim award of 96 million shares serves as a “good faith” payment honoring Musk’s voided 2018 $50 billion pay package, which was invalidated by a Delaware court earlier this year.
Key Conditions of the Deal
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Musk must remain Tesla’s top executive for at least two more years to claim the shares.
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He must hold the stock for five years and can purchase shares at $23.34 each—the same price as his 2018 package.
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A long-term compensation plan will be voted on at Tesla’s November 6 shareholder meeting.
The move signals the board’s confidence in Musk despite recent controversies, including his political endorsements and divided attention across his other ventures (xAI, SpaceX, X/Twitter). Tesla’s core auto business faces declining sales due to aging models, fierce competition, and brand erosion linked to Musk’s polarizing public statements. Data from S&P Global Mobility reveals Tesla’s brand loyalty plummeted after Musk endorsed Donald Trump in 2023.
With its robotaxi unveiling (August 8) and Optimus humanoid robot ambitions, Tesla is betting heavily on AI and autonomy. Musk has warned he might divert focus elsewhere unless granted greater control over Tesla—a threat this new package seems to address. The board’s decision underscores Musk’s irreplaceable role in Tesla’s future, even as investors weigh risks from his political entanglements and multi-company commitments.
The payout, while staggering, reflects Tesla’s urgent need to stabilize leadership during a make-or-break transition—one that could redefine the company far beyond electric vehicles.
