Elon Musk gets $29 billion stock award from Tesla under interim pay plan

Electric vehicle (EV) maker Tesla on Monday said it has approved the grant of 96 million shares, valued at approximately $29 billion, as part of an interim stock award to Chief Executive Officer (CEO) Elon Musk.

 

The stock award, referred to as the “2025 CEO Interim Award,” was approved by Tesla’s board on August 3. The shares will vest two years from the grant date, provided Musk remains in continuous service as CEO or in an approved senior executive role at the company, the company said in a Securities and Exchange Commission (SEC) filing. 

 

The move follows a 2024 ruling by a Delaware court that invalidated Musk’s 2018 compensation package—worth more than $50 billion—on the grounds that the Tesla board’s approval process was flawed and unfair to shareholders, reported Reuters. The ruling is currently under appeal before the Delaware Supreme Court.

 

The company stated that the interim award would be forfeited if there is a final court ruling that allows Musk to exercise his earlier 2018 performance-based options in full. 

 

'A deal is a deal': Tesla board

 

In a letter to shareholders, Robyn Denholm and Kathleen Wilson-Thompson — the two directors who constitute Tesla’s special committee — wrote, “We believe we must take action to honour the bargain that was struck in 2018. After all, ‘a deal is a deal.’ Thus, as evidence that Tesla is committed to honouring its promises in the 2018 CEO Performance Award and intends to compensate its CEO for his future services commensurate with his contributions... we have recommended this award as a first step, ‘good faith’ payment to Elon.”

 

Musk, who has led Tesla since 2008, is the company’s largest shareholder, holding approximately 13 per cent of its shares, according to Reuters. He recently told Bloomberg that he remains committed to leading the company for at least another five years.

 

"While we recognize that  Elon’s business ventures, interests and other potential demands on his time and attention are extensive and wide-ranging, including his leadership roles at xAI, SpaceX, Neuralink, X Corp., and The Boring Company as well as his other interests, we are confident that this award will incentivise Elon to remain at Tesla and focus his unmatched leadership abilities on further creating shareholder value for Tesla shareholders and attracting and retaining talent at Tesla. To be clear, losing Elon would not only mean the loss of his talents but also the loss of a leader who is a magnet for hiring and retaining talent at Tesla," the company said.