Tesla Awards $29 B Share Grant to Retain Elon Musk
Tesla’s board has approved a $29 billion stock grant for CEO Elon Musk. The award includes 96 million restricted shares and is intended to encourage Musk to stay in a leadership role as the company shifts focus to robotaxis and humanoid robots. Musk, already Tesla’s largest individual shareholder, could see this increase his stake from about 13% to over 15%.
Tied to Key Conditions
To receive the grant, Musk must:
- Remain a top executive at Tesla for two more years,
- Exercise shares at $23.34 each (the same price as the 2018 package),
- Hold the shares for five years.
If the earlier 2018 compensation plan is reinstated by a court, this new grant would be canceled or adjusted to avoid double payment.
Legal Background and Corporate Strategy
Tesla’s 2018 pay package for Musk, once valued at over $50 billion, was voided by a Delaware court on grounds of unfair approval processes. Tesla has appealed that ruling and now considers the new award a “good faith” effort to compensate Musk during this transition period.
Market and Analyst Reactions
After the announcement, Tesla’s stock rose by nearly 2%. Many investors view Musk as essential to Tesla’s future in AI and robotics, though some critics argue the compensation is excessive. Tesla has come under pressure due to falling sales, rising competition, and concerns about Musk’s political involvement potentially distracting him from company leadership.
Tesla’s Vision Moving Forward
The company is continuing its push into advanced technologies. The board highlighted Musk’s role in guiding Tesla toward autonomous driving and artificial intelligence as reasons for the interim compensation plan. A long-term compensation proposal will be presented to shareholders at the November 6 annual meeting.
