Tesla Inc (TSLA.O) has granted Chief Executive Elon Musk a $29 billion compensation package in restricted stock, pending the outcome of a legal battle over his earlier $56 billion 2018 CEO Performance Award. The new arrangement is intended to retain Musk as the company enters a new phase focused on artificial intelligence and robotics.
The award, disclosed in a letter from Tesla’s board special committee posted on the company’s X account, includes 96 million shares that Musk will receive if he remains in a senior leadership position for at least two years. The shares will be subject to a five-year holding period from the date of the grant.
A Letter to Our Shareholders on the 2025 CEO Interim Award
Dear Fellow Tesla Shareholders,
Today we announce an important first step in compensating Elon Musk for his extraordinary work at Tesla. As you know, Elon has not received meaningful compensation for eight years since…
— Tesla (@Tesla) August 4, 2025
“In light of the company’s strategic shift toward becoming a leader in AI, robotics, and related services, the committee determined that a new performance-driven award was in Tesla’s best interest,” the committee stated.
Musk’s original 2018 pay package, which was approved by shareholders, was invalidated by Delaware Chancery Court Chancellor Kathaleen McCormick in 2024 following a lawsuit filed by investor Richard J. Tornetta. Tesla is appealing that ruling. If the 2018 plan is reinstated in full, the new award would be forfeited.
Tesla shareholders reaffirmed their support for the 2018 compensation earlier this year, but the court once again rejected it. In a related development, the court ordered Tesla to pay $345 million in legal fees to Tornetta’s attorneys.
Musk has previously voiced concerns about losing control of the company. The interim package also increases his voting power upon grant, potentially easing those concerns as Tesla fends off pressure from activist investors.
Source: Teslarati