Tesla Hands Musk $29 Billion Stock Package to Keep Him at the Helm

Tesla’s board has approved a stock award valued at about $29 billion for CEO Elon Musk, a move aimed at retaining the billionaire entrepreneur as the company pivots toward artificial intelligence and fights a court ruling that voided his previous pay package.

The grant, disclosed in an Aug. 3 Securities and Exchange Commission filing, gives Musk 96 million restricted shares at a purchase price of $23.34 each—the same strike price as his rescinded 2018 award. At current market prices, the stock is worth roughly $29 billion.

The new award follows a 2024 ruling by the Delaware Court of Chancery that voided Musk’s record‑setting 2018 compensation plan, valued at more than $50 billion, after finding Tesla’s board process flawed and unfair to shareholders. That decision, later known as the Tornetta ruling, ordered the plan rescinded and sparked a high‑profile appeal by Musk, who claims that the judge made multiple legal errors in striking down the package.

In a letter to shareholders, Tesla’s board described Musk’s new package as “an important first step” in compensating him for his “extraordinary” work at the company. The directors cited his “unique vision and leadership” in building Tesla’s shareholder value and said that “retaining Elon is more important that ever before” as the company faces a challenging transition.

The board described the current moment as pivotal for Tesla, as it shifts from a pure electric‑vehicle and renewable‑energy firm toward an ambitious push into artificial intelligence (AI), robotics, and related services. The directors said the impending changes could unlock extraordinary shareholder value but warned that “outcomes are not guaranteed,” hence the need for a proven leader to guide Tesla through the transition.

“To succeed, it requires a leader who combines strategic foresight, adaptability, and relentless execution to outperform competition and inspire the team,” the board said. “Elon has demonstrated these unmatched leadership abilities time and time again with his unparalleled track record of delivering shareholder value since he joined as a founding figure and spearheaded the transformation of our extraordinary company.”

The award caps a process that involved a special Tesla committee reevaluating Musk’s compensation in light of the unfavorable Delaware court ruling and broader strategic changes. The new grant mirrors the 2018 plan’s strike price and is structured to gradually increase Musk’s voting power, something both Musk and investors have argued is essential for keeping him focused on Tesla’s mission as it enters a new phase of growth.

Shares of Tesla rose by more than 2 percent in premarket trading following the announcement.

The stock award underscores Tesla’s transition beyond its core electric‑vehicle business. Musk has increasingly cast Tesla as an AI and robotics company, highlighting projects such as its Full Self‑Driving driver‑assistance system, the Optimus humanoid robot, and a planned robotaxi fleet. That shift coincides with a major new semiconductor partnership, with Samsung’s upcoming $17 billion chip fabrication plant in Texas expected to produce Tesla’s next‑generation AI6 chips.

The pay package announcement also comes amid evolving ties between Musk and the Trump administration. President Donald Trump said in July that he does not intend to revoke Musk’s federal contracts—including those tied to his AI startup xAI and aerospace firm SpaceX—despite earlier White House signals that such deals were under review.

“Everyone is stating that I will destroy Elon’s companies by taking away some, if not all, of the large‑scale subsidies he receives from the U.S. Government,” Trump wrote on Truth Social on July 24. “This is not so! The better they do, the better the USA does.”

Relations between Musk and Trump have see-sawed in recent months, after being strained by a public disagreement over the fiscal impact of Trump’s flagship One Big Beautiful Bill Act. Despite those tensions, SpaceX remains a critical NASA and Pentagon contractor, recently winning part of a $13.5 billion launch services deal that runs through 2029.