Tesla is betting $29 billion that Elon Musk is still the only man who can drive its future.
Tesla has granted CEO Elon Musk a colossal $29 billion (£21.7 billion) in restricted stock—equivalent to 96 million shares—as part of a bold bid to retain his leadership during the company’s high-stakes shift from electric vehicles to AI and robotics. The award comes just months after a Delaware court voided Musk’s previous $56 billion pay package, citing concerns over fairness and board independence.
As reported by BBC News, the company believes this newly issued stock grant will motivate Musk to remain fully committed to Tesla at a time when competition for top-tier AI talent is escalating rapidly.
🧠 Why Tesla Made This Move Now
According to Business Insider, the board sees Musk as the company’s “greatest asset” and fears that without direct financial incentive, his attention could be pulled away by his other ventures—including SpaceX, Neuralink, The Boring Company, and his latest AI startup, xAI.
To prevent a potential “brain drain,” Tesla structured the award similarly to the 2018 package, tying it to time-based restrictions and a five-year holding period. Musk must remain as CEO or “Chief Product Officer” through 2027 to qualify for the payout.
Meanwhile, AP News explains that the board stated on X (formerly Twitter) that “no one matches Elon’s remarkable combination of leadership experience and technical expertise,” asserting that the award is a necessity—not a luxury.
🔄 Fallout from the Delaware Court Ruling
In January 2024, a Delaware judge struck down Musk’s historic 2018 pay plan, declaring that Tesla’s board failed to exercise proper oversight and that shareholders weren’t adequately informed. Musk is currently appealing the decision, arguing that the court overstepped its role and that pay decisions should rest with shareholders, not judges.
However, according to Financial Times, Tesla built a safeguard into the new deal: if Musk’s original $56 billion package is eventually reinstated by the courts, he will return or forfeit the newly issued shares to avoid any “double dip.”
Wedbush Securities analyst Dan Ives told the BBC that the company “cannot afford to have Musk only semi-committed” during this pivotal AI shift, calling the award a “huge step forward” in keeping Musk’s focus locked on Tesla.
A sleek blue Tesla sits outside a Tesla dealership as the company pushes forward with cheaper models and new self-driving ambitions.
⚙️ Why This Isn’t Just About the Money
Beyond the pay dispute, this moment marks a strategic turning point for Tesla. According to People, the company is no longer framing itself as just an electric vehicle manufacturer. Instead, it is aggressively leaning into its AI and robotics ambitions, including autonomous driving, Optimus humanoid robots, and Tesla Bot R&D.
As the AI arms race intensifies—with companies like Meta and Microsoft poaching from rivals and offering seven-figure packages—Tesla needs to keep its biggest visionary fully engaged. Tesla’s board says the firm is at an “inflection point,” and Musk’s leadership is essential to their transformation from an auto company into an AI pioneer.
📈 What’s Next for Shareholders?
A shareholder vote will be held later this year to potentially reinstate Musk’s 2018 pay package. In the meantime, this $29 billion interim award ensures he holds enough shares to maintain or even increase his influence.
According to Investors.com, the stock grant will increase Musk’s stake in Tesla from just under 13% to about 16%, strengthening his grip over future board decisions.
With Tesla’s stock down over 25% year-to-date and facing growing pressure from Chinese EV makers and U.S. competitors like GM and Ford, Musk’s continued involvement is seen as critical to investor confidence and innovation momentum.
A fleet of fresh white Teslas heads to market, symbolizing the company’s continued dominance in the EV sector amid its strategic shift toward AI and robotics.
❓ People Also Ask (FAQ)
What makes this award different from the voided $56B package?
This $29 billion grant is entirely time-based and contingent on Musk remaining in a leadership role through 2027. The 2018 deal was performance-based and already fulfilled its milestones.
What happens if Musk wins his appeal?
If the Delaware court reinstates the 2018 deal, Musk will forfeit the new stock award to prevent being paid twice for the same service period.
How will this affect Tesla’s stock or investors?
It could boost shareholder confidence and stabilize leadership, but critics argue that excessive compensation dilutes equity and signals weak governance.
Why is Tesla focusing so heavily on AI now?
Tesla aims to lead in AI-powered robotics, self-driving tech, and humanoid systems, pushing beyond its EV roots to compete in emerging tech sectors where talent is scarce and expensive.
🚀 The Bottom Line: Musk Isn’t Going Anywhere—Yet
Tesla’s $29 billion stock award is not just a golden parachute—it’s a seatbelt for the company’s most unpredictable driver. With multiple ventures vying for his time, this deal fastens Musk to Tesla’s future at a moment when the company is trying to redefine its identity.
As the AI arms race intensifies and the EV market matures, the stakes couldn’t be higher. Whether you love him or loathe him, one thing is clear: Elon Musk remains Tesla’s most powerful engine—and the board isn’t ready to let go of the keys.