Tesla’s New Pay Deal for Musk: A $29B Attempt to Secure his Future

The board of directors at Tesla has approved a new compensation package for CEO Elon Musk, awarding him $29 billion in shares in an attempt to secure his future with the company. The move follows a US court’s invalidation of his previous $56 billion pay package. The award, a “good faith” payment, allows Musk to purchase 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 concerns about Musk’s divided attention due to his numerous ventures and political activities. They stated that the new award is a “critical first step” toward “keeping Elon’s energies focused on Tesla” and ensuring his long-term commitment.
Musk’s political endorsements and his relationship with Donald Trump have reportedly had a negative impact on the Tesla brand and sales. A survey from S&P Global Mobility showed a sharp and “unprecedented” decline in customer loyalty, with the percentage of repeat buyers falling significantly. This data highlights the challenges 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. The new compensation package will be forfeited if the original 2018 deal is reinstated.