Tesla’s board has approved a new $29 billion share award for CEO Elon Musk, a decision aimed at ensuring his continued focus on the company’s ambitious future. The award is a “good faith” replacement for his previous $56 billion pay package, which was recently voided by a US court. Musk will pay $2 billion to acquire 96 million shares at the original 2018 price, mirroring the terms of the rescinded deal.
The special committee of the board, through a letter from chair Robyn Denholm and director Kathleen Wilson-Thompson, directly addressed shareholder anxieties. They acknowledged concerns about Musk’s time being split between multiple ventures like SpaceX, X, and xAI, as well as his political activities. The board’s letter stated that the new award is a “critical first step” toward “keeping Elon’s energies focused on Tesla.”
Musk’s increasing involvement in politics, including his support for Donald Trump, has reportedly had a negative impact on Tesla’s brand and customer loyalty. A survey from S&P Global Mobility showed a dramatic decline in the percentage of Tesla owners who bought another Tesla, a drop an analyst described as “unprecedented.” The data suggests that Musk’s public image and political affiliations are having a tangible effect on the company’s sales.
The new shares will increase Musk’s ownership stake from 13% to approximately 15%, giving him greater voting power. This is a key demand from Musk, who has argued that more control is essential to protect Tesla from activist shareholders as it pivots its business model toward AI, robotics, and robotaxis. The board’s letter explicitly states that the award is designed to gradually increase his influence, securing his long-term commitment. This new package will be forfeited if the original 2018 deal is reinstated.