Tesla’s board of directors has approved a $30 billion stock award for CEO Elon Musk, following a US court’s decision to void his previous $56 billion pay package. Musk will purchase 96 million shares of Tesla stock at the same price as the 2018 package, valued at $23.34 per share, amounting to a total of $2 billion. The award is designed to incentivize Musk to remain at Tesla, particularly as the company navigates a critical phase in its business and appeals the court’s decision.
The decision was made based on a recommendation from a special committee consisting of Tesla’s chair, Robyn Denholm, and director Kathleen Wilson-Thompson. In a shareholder letter, Denholm and Wilson-Thompson described the award as a “good faith” payment, emphasizing the importance of honoring the 2018 agreement. “To recognise what Elon has accomplished and the extraordinary value he delivered to Tesla and our shareholders, we believe we must take action to honour the bargain that was struck in 2018,” they wrote. “After all, ‘a deal is a deal.'”
The award has sparked varied reactions, with some analysts and investors welcoming the move as a means to retain Musk’s focus on Tesla. Wedbush analyst Dan Ives noted that the award would remove downward pressure on the stock and likely ensure Musk remains as CEO for several years. “Musk remains Tesla’s big asset, and this comp issue has been a constant concern for shareholders,” Ives said.
However, Tesla’s shares have faced challenges this year, falling nearly 20% amid increased competition in the electric vehicle market and controversy surrounding Musk’s political affiliations. A survey by S&P Global Mobility found that Tesla’s customer loyalty has declined significantly since Musk endorsed Donald Trump, with repeat purchases dropping from 73% in June 2024 to 49.9% in March 2025. Tom Libby, an S&P analyst, described the decline as “unprecedented,” stating, “I’ve never seen this rapid of a decline in such a short period of time.”
The board’s decision also highlights concerns about Musk’s divided attention, given his roles at other companies, including xAI, SpaceX, Neuralink, and X Corp. Nevertheless, the directors are confident that the award will motivate Musk to prioritize Tesla’s mission. “While we recognize that Elon’s business ventures, interests, and other potential demands on his time and attention are extensive and wide-ranging… we are confident that this award will incentivize Elon to remain at Tesla,” they wrote.
The award is structured to gradually increase Musk’s voting power, aligning with his and shareholders’ views on the importance of his focus on Tesla’s mission. Musk currently holds a 13% stake in Tesla, and this award could further solidify his position within the company. As Tesla shifts its focus toward artificial intelligence and robotics, including robotaxis and humanoid robots, Musk’s leadership and vision for the company are seen as critical to its future success.