Tesla has awarded its CEO Elon Musk a massive $29 billion (approximately £21.7 billion) in company shares, in a strategic bid to retain the billionaire visionary as the firm battles for dominance in the fast-evolving artificial intelligence (AI) sector.
The move comes months after a Delaware court invalidated Musk’s controversial 2018 pay package — initially valued at over $50 billion — ruling it was “unfair to shareholders.” Musk, however, has continued to challenge the ruling and is appealing the decision, claiming that the lower court made legal errors and that shareholders should determine executive compensation.
Tesla’s board remains firmly behind Musk, arguing that the new share award is critical for the company’s future. In a statement shared on X, the social platform owned by Musk, Tesla’s directors said:
“It is imperative to retain and motivate our extraordinary talent, beginning with Elon. No one matches Elon’s remarkable combination of leadership experience and technical expertise.”
Tesla emphasized that the share grant will significantly boost Musk’s voting power within the company and help steer Tesla through what it called an “inflection point,” as it transitions from a leading electric vehicle manufacturer to a major player in AI and robotics.
“If the Delaware court reinstates Musk’s original 2018 package,” Tesla added, “he would forfeit or return the latest share award to avoid a double dip.”The 2018 compensation plan, heralded as the largest in corporate history, was structured around strict performance goals.
Musk would only be compensated if Tesla achieved specific milestones in market capitalisation, revenue, and profitability, all of which he met. The timing of the latest stock award is also strategic.
As the race for top AI talent intensifies, firms like Meta and Microsoft are reportedly offering massive pay incentives to attract experts from leading companies, including OpenAI and Google.
Tesla’s board believes Musk’s continued leadership will be pivotal in attracting and retaining world-class talent.The billionaire entrepreneur currently juggles multiple high-profile roles, including executive positions at xAI, Neuralink, and The Boring Company.
Tesla said the new stock package was designed to remain compelling even amid “other demands on his time and attention.”With this new pay deal, Tesla hopes to anchor Musk’s focus at a critical juncture for the company, one where the lines between automotive innovation, AI, and robotics are rapidly converging.
