Prime Highlights
- Tesla’s board awarded Elon Musk 96 million restricted shares worth about $30 billion.
- The award vests in more than two years, with a five-year holding period and a fixed purchase price of $23.34 per share.
Key Fact
- The action brings Musk’s Tesla stake to almost 16%, cementing his grip as Tesla turns its focus to AI and robotics.
Key Background
In a last-minute attempt to hold on to Elon Musk at the helm, Tesla’s board has authorized an enormous interim compensation package valued at almost $30 billion. Among the rewards is 96 million restricted stock options aimed at keeping Musk and steering Tesla through a time of strategic overhaul. The award is part of an overall drive to keep top-level executive talent as shareholder pressure and the courts ratchet up.
The new award mirrors the format of Musk’s prior 2018 pay package, which was dismissed in early 2024 by a Delaware court as not being equitable to shareholders. In order to remedy concerns of fairness and governance, the new award contains clear performance targets, holding periods, and leadership commitments. Musk will have to stay in a high-level leadership role for two years before shares vest and keep them for a minimum of five years before selling them. The shares will cost $23.34 per share—the same amount utilized in the initial 2018 agreement.
Tesla’s board has underscored the strategic value of keeping Musk on board as the automaker transitions from electric vehicles into artificial intelligence, autonomous transport, and humanoid robotics. These technologies are being viewed as pillars for growth in Tesla’s future, and Musk as key to recruiting engineering talent and investor confidence. The pay package is not solely a monetary incentive but also a long-term inducement to ensure leadership continuity in Tesla’s next cycle of innovation.
If Musk’s originally blocked 2018 package is refilled through persistent legal appeals, the newly issued shares will be forfeited to prevent duplication of executive pay. However, the board views this present award a move that is required to “energize and focus” Musk’s participation during this pivotal time of technological transformation.
