Elon Musk is set to receive a major payday from Tesla as the company continues to fight a legal battle over a previous, even larger compensation plan.
In a letter to shareholders on Monday, Aug. 4, Tesla revealed that Musk will be granted 96 million Tesla shares, stating that he “has not received meaningful compensation for eight years.”
With each share trading above $300, the new award is worth roughly $29 billion, according to CNN and CNBC.
Tesla defended the decision, saying: “rewarding Elon for what he has done and continues to do for Tesla is the right thing to do.”
The letter continued: “The Special Committee believes now is the right time to take decisive action to recognize the extraordinary value that Elon created for Tesla shareholders. As such, the Board (with Elon and Kimbal Musk, his brother, recusing themselves), has unanimously approved a recommendation from the Special Committee of the Board to grant Elon an award of restricted stock equal to approximately one-third of the compensation he earned under the 2018 CEO Performance Award.”
:max_bytes(150000):strip_icc():focal(999x0:1001x2):format(webp)/elon-musk-oval-office-053025-48f5db0fa26f453389845b9f7c21a850.jpg)
At the same time, Tesla noted that its legal efforts to reinstate the original 2018 CEO Performance Award “continue in the Delaware courts,” adding that there’s “no clear timeline for resolution.”
A Delaware court had previously struck down that 2018 award after a shareholder lawsuit. Musk is appealing the ruling, CNN reported.
The original compensation plan, which was valued at $56 billion, had received shareholder approval in June 2024. However, a Delaware judge later ruled it was not properly granted, according to CNBC.
Should Musk prevail in court, this new stock award would reportedly be voided.
“Despite these legal challenges, we can all agree that Elon has delivered the transformative and unprecedented growth that was required to earn all milestones of the 2018 CEO Performance Award,” Tesla stated in the letter. “This growth has translated into immense value generated for Tesla and all our shareholders.”
The company further emphasized, “To recognize what Elon has accomplished and the extraordinary value he delivered to Tesla and our shareholders, we believe we must take action to honor the bargain that was struck in 2018.”
Tesla also stressed that “retaining Elon is more important than ever” as the company faces a pivotal moment in its evolution.
“Through Elon’s unique vision and leadership, Tesla is transitioning from its role as a leader in the electric vehicle and renewable energy industries to grow towards becoming a leader in AI, robotics and related services,” the letter said. “To succeed, it requires a leader who combines strategic foresight, adaptability, and relentless execution to outperform competition and inspire the team.”
The payout comes at a turbulent time for Tesla, with The New York Times reporting that Musk’s involvement in the Donald Trump administration and Republican politics has distanced some liberal consumers—who are typically more inclined to buy electric vehicles.
Still, the compensation appears to dispel speculation that tensions had developed between Musk and Tesla’s board, Reuters noted, even as the company grapples with declining sales.
