Tesla’s board of directors has approved a new $29 billion stock award for CEO Elon Musk, a move that serves as a powerful vote of confidence in his leadership. This decision follows a US court’s invalidation of his previous $56 billion pay package from 2018. The award, recommended by a special committee, is a “good faith” payment that allows Musk to acquire 96 million shares at the original 2018 price for $2 billion.
In a letter to shareholders, board members Robyn Denholm and Kathleen Wilson-Thompson addressed the widespread concerns about Musk’s divided attention due to his many other ventures and political activities. They stated that the new award is a “critical first step” toward “keeping Elon’s energies focused on Tesla” and securing his long-term commitment.
Musk’s political endorsements and his relationship with Donald Trump have reportedly damaged the Tesla brand and customer loyalty. A survey from S&P Global Mobility showed a sharp and “unprecedented” decline in the percentage of Tesla owners who bought another Tesla, a trend that highlights the challenges the company faces beyond just market competition.
The new shares will increase Musk’s ownership stake from 13% to about 15%, giving him greater control. Musk has consistently argued that more voting power is necessary to protect the company from activist shareholders as it shifts its focus to AI and robotics. The board’s letter confirms that the award is designed to gradually increase his influence, cementing his long-term leadership. This new compensation package will be forfeited if the original 2018 deal is reinstated.