04.08.2025 12:16

Tesla's board of directors has approved a significant stock award for Elon Musk, totaling approximately $29 billion in value, to ensure his continued leadership as CEO. This substantial compensation package, consisting of 96 million shares, aims to retain Musk amidst ongoing legal battles concerning a previously awarded compensation plan.

The newly granted stock option package mirrors the structure of a 2018 deal that a Delaware judge subsequently invalidated in 2024, citing a flawed approval process and insufficient board independence due to the close ties between the board members and Musk himself. Following the court's decision, Musk initiated an appeal in March, alleging significant legal errors in the judge's ruling.

While the appeal process unfolds, Tesla's board has proactively acted to secure Musk's commitment. The board's special committee explicitly stated in a regulatory filing that the award serves as a powerful incentive for Musk to remain at the helm of Tesla, acknowledging the multitude of his other business endeavors.

Unlike an immediate grant, the 96 million shares are subject to a vesting period and require Musk to purchase them at a price of $23.34 per share, a figure identical to the 2018 award. This substantial financial commitment, potentially billions of dollars from Musk's personal funds, is designed to provide significant motivation and ensure his long-term focus on Tesla's success.

Importantly, this new stock package is intentionally structured to gradually enhance Musk's voting power within the company. This strategic move reflects both Musk's and other shareholders' beliefs that increased voting control is crucial for aligning his interests with Tesla's long-term strategic objectives. The committee explicitly confirmed this intention in their filing, emphasizing the award's design to reinforce Musk's commitment to Tesla's future. With his current stake at roughly 13%, this substantial award will undoubtedly consolidate Musk's influence over Tesla's direction.