Tesla Board Awards Musk $29B as ‘Critical First Step’ to Realign His Focus

Tesla’s board of directors has approved a new $29 billion stock award for CEO Elon Musk, a move that comes after a U.S. court invalidated his previous pay package. In a letter to shareholders, the board candidly addressed concerns about Musk’s political activities and divided attention, presenting the new award as a proactive measure to solve these issues. This “good faith” payment will allow Musk to acquire 96 million shares at the original 2018 price for $2 billion.
The decision was recommended by a special committee of the board, which included chair Robyn Denholm and director Kathleen Wilson-Thompson. They called the award a “critical first step” toward “keeping Elon’s energies focused on Tesla.” The board’s reasoning is that this new compensation package will incentivize Musk to remain with the company and secure his long-term commitment.
The company has seen its brand reputation take a hit, with reports suggesting that Musk’s political endorsements and his association with Donald Trump have damaged sales. A survey from S&P Global Mobility showed a dramatic decline in customer loyalty, with the percentage of repeat buyers falling significantly. An analyst described this drop as “unprecedented,” underscoring the significant challenges the company faces due to its CEO’s public persona.
The new shares will increase Musk’s ownership stake from 13% to approximately 15%, giving him greater voting power. Musk has long argued that more control is necessary to protect the company from activist shareholders as it shifts its focus toward AI and robotics. The board’s letter confirms that the award is designed to gradually increase his influence, ensuring his leadership. This new compensation package will be forfeited if the original 2018 deal is reinstated.