Tuesday, August 5, 2025 - Tesla CEO, Elon Musk has been granted a $29 billion pay package by the company’s board, marking another massive compensation deal amid ongoing legal and shareholder scrutiny.
This package, tied to Musk’s controversial 2018 performance
award, comes as Tesla continues to fight a Delaware court’s decision to strike
down the original agreement after a shareholder lawsuit. Musk is currently
appealing the court’s ruling.
In a letter to shareholders on Monday, August 4, Tesla’s
board emphasized that Musk has “not received meaningful compensation for eight
years” and reaffirmed the company’s ongoing legal efforts to reinstate the 2018
package. “There’s no clear timeline for resolution,” the letter stated.
The deal would grant Musk 96 million Tesla shares, each
currently trading above $300, at a fixed purchase price of $23.34 per share—the
same terms set in the 2018 agreement.
Tesla board members Robyn Denholm and Kathleen
Wilson-Thompson praised Musk’s contributions: “Despite these legal challenges,
we can all agree that Elon has delivered the transformative and unprecedented
growth required to earn all milestones of the 2018 CEO Performance Award.”
Musk, who does not receive a salary or bonus from Tesla,
relies on such stock option packages for compensation. As Tesla’s largest
individual shareholder, he owns roughly 13% of the company.
However, Musk’s recent political involvement has sparked
backlash. His extensive support for Republican candidates in recent elections
led to protests at Tesla dealerships and a drop in sales.
Tesla has also been affected by US President Donald Trump’s
domestic policies, which have removed tax incentives and regulatory credits for
electric vehicles—a key revenue stream for the company.
Tesla shares have declined 25% this year, though the stock
rose nearly 3% in premarket trading following the announcement.
In response to shareholder pressure, Musk has pledged to
refocus his efforts on Tesla. The new pay package is seen as an incentive to
keep him at the helm as the company navigates significant challenges and shifts
its strategic direction.
Tesla is now pushing beyond its electric vehicle roots,
increasingly focusing on artificial intelligence and robotics. “Through Elon’s
unique vision and leadership, Tesla is transitioning from a leader in the
electric vehicle and renewable energy industries to becoming a leader in AI,
robotics, and related services,” the board wrote.
One of the company’s flagship projects in this new direction
is its scaled-back but still highly anticipated robotaxi service, now in the
early stages of rollout.
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