Tesla has approved a share award valued at approximately $29 billion for CEO Elon Musk, as part of a new pay arrangement designed to secure his leadership through a critical period of transformation. The electric vehicle maker is shifting focus from its core car business to emerging technologies, including robotaxis and humanoid robots.
The package, described as an interim award of 96 million new shares, is being positioned as a partial gesture of good faith towards a 2018 compensation agreement worth over $50 billion. That earlier deal was invalidated by a Delaware court last year, but is currently under appeal.
Musk will only be able to claim the new shares if he remains in a senior executive role for the next two years and if the courts do not reinstate the original 2018 plan. He must also hold the shares for five years, with the option to buy them at $23.34 per share, the same price set in the 2018 agreement.
A separate, longer-term CEO pay plan is expected to be put to a shareholder vote during Tesla’s annual investor meeting on 6 November.
The move is intended to keep Musk focused on Tesla as it navigates a shift away from traditional automotive manufacturing. He is seen as the key figure behind Tesla’s push into autonomous vehicles and robotics. It also appears to counter speculation that the board may be losing patience following a turbulent few months, which have included Musk’s growing involvement in politics.
The decision to increase Musk’s influence at Tesla signals continued faith from the board in his ability to address the company’s widening list of strategic and operational challenges.
Tesla has been dealing with declining sales due to an ageing vehicle lineup and increased competition, alongside criticism of Musk’s political activity, particularly his public support for former U.S. President Donald Trump.
Musk’s growing commitments outside of Tesla, including his AI startup xAI, have also prompted questions about how much of his time remains dedicated to the carmaker, which remains the main driver of his wealth. Musk has previously warned that he may walk away unless he receives more control of the company.
Markets appeared to respond positively to the announcement, with Tesla shares climbing nearly 2% in early trading. Despite this, the stock remains down about 25% since the beginning of the year.
