Tesla’s board of directors has approved a new $29 billion stock award for CEO Elon Musk, a decision made after a U.S. court invalidated his previous pay package. In a letter to shareholders, the board acknowledged concerns about Musk’s political activities and divided attention, framing the new award as a way to address these issues. The award, a “good faith” payment, allows Musk to acquire 96 million shares at the original 2018 price for $2 billion.
The decision was recommended by a special committee, which included chair Robyn Denholm and director Kathleen Wilson-Thompson. They described the award as a “critical first step” toward “keeping Elon’s energies focused on Tesla.” The board believes this new compensation package will be a strong incentive for Musk to remain at the company and secure his long-term commitment.
The company has been facing significant brand challenges, with reports suggesting that Musk’s political endorsements and his relationship with Donald Trump have damaged the Tesla brand and its 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,” highlighting the difficulties 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 pivots its strategy 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.