- Tesla has officially announced an impressive $29 billion pay deal for Elon Musk.
- The board stated that this “good faith” bonus was crucial to keep Musk motivated as CEO.
- This decision comes after Musk’s massive 2018 pay package was invalidated by a Delaware judge in late 2024.
Tesla has revealed a new pay package worth $29 billion for Elon Musk on Monday. The electric vehicle titan’s board has granted Musk 96 million restricted shares of Tesla stock in a “good faith” performance award, equating to just over $29 billion based on the stock’s current valuation.
This package comes amid uncertainty surrounding Musk’s previous pay deal from 2018, which had a value of about $46.8 billion in June but was overturned due to a growling lawsuit from shareholders from a Delaware court ruling last December.
In a note to shareholders, board members Robyn Denholm and Kathleen Wilson-Thompson claimed that this new compensation was essential to “retain and incentivize” Musk, who is facing a heated competition for AI talent.
“Recently, the competitive atmosphere for AI expertise has intensified, with many companies engaging in multi-billion-dollar buyouts and offering nine-figure cash compensations for top AI engineers,” they noted. “Among this elite group, Elon’s unique blend of leadership skills, technical know-how, and a remarkable history of dragging together revolutionary and lucrative businesses across various sectors makes him unparalleled.”
Musk and Tesla have been vocal opponents of the judge’s ruling on the 2018 pay package, and Musk has even filed an appeal as of March.
In a Securities and Exchange Commission document shared via X, the Tesla board stated that Musk must maintain his senior leadership role at Tesla for the two-year vesting period, as part of this $29 billion “CEO Interim Award.” Moreover, the award is designed to “progressively increase” Musk’s voting rights upon grant, which addresses Musk’s concerns regarding his influence over Tesla. Back in January, he expressed his discomfort with expanding the company’s AI and robotics arms without having around a 25% voting share.
Denholm and Wilson-Thompson have stated that the board supported the interim award unanimously, with Musk and his brother, Kimbal, stepping aside from the decision-making process.
During Tesla’s annual shareholder meeting in November, shareholders will examine a longer-term CEO compensation plan. According to their letter, Musk’s interim award will be nullified or returned should his 2018 pay package be reinstated to avoid undue duplicity.
Recently, investors have expressed worries about Musk’s dedication to Tesla, especially given the company’s faltering performance while he simultaneously engages in high-profile political pursuits.
As of now, Tesla’s stock is reportedly down roughly 25% this year. However, the stock showed about a 3% increase in premarket trading following the board’s recent announcement.
