Tesla announced on Monday that it would grant CEO Elon Musk approximately $29 billion worth of shares in provisional payments, although his existing compensation package is still entangled in legal issues.
In a letter addressed to shareholders, Tesla’s Chairman Robin Denholm and board member Kathleen Wilson Thompson stated that the company is offering Musk 96 million shares as a gesture of “good faith.”
The board expressed confidence that this award would ultimately remain at Tesla, thereby enhancing shareholder value and promoting exceptional leadership to attract and retain talented individuals at the company.
They noted, “Losing Elon would not just mean losing his skills, but also losing a pivotal leader who draws in and keeps talent at Tesla.”
Musk’s compensation plan from 2018 has been under legal scrutiny for several years. In January, Delaware Chancery Judge Cataline McCormick ruled it to be worth $56 billion, and it had not been openly negotiated. She subsequently blocked the deal in December, following a shareholder vote to reaffirm it.
Denholm and Wilson Thompson clarified on Monday that there would not be a “double dip” if the pay package receives court approval.
They acknowledged that one of the major concerns for shareholders is keeping Elon focused on Tesla.
This past year has been turbulent for Tesla amid Musk’s political activity. After backing President Trump’s 2024 campaign and securing a position in his administration, Musk saw Tesla’s stock price increase alongside hopes for profitability.
However, his role in the government led to intensified cost-cutting measures within the electric vehicle sector, impacting Tesla. Eventually, Musk announced his intention to step back from the Trump administration.
Shortly thereafter, a public disagreement emerged between Musk and Trump over financial strategies, causing concern among investors as the president hinted at targeting Musk’s government subsidies and contracts.
In late July, Musk indicated that Tesla might experience “roughly” several challenging quarters following a 16% revenue decline. Still, he remained hopeful about the company’s future, with a growing focus on artificial intelligence and robotics.
