Tesla Board Awards Musk $29B in Shares, Defying Court Decision

In a move that appears to defy a court ruling, Tesla’s board has approved a new $29 billion stock award for CEO Elon Musk. The decision is a direct response to a US court voiding his original $56 billion pay package from 2018. The new award, a “good faith” payment, allows Musk to acquire 96 million shares at the original 2018 price for $2 billion.
The decision was detailed in a shareholder letter from board members Robyn Denholm and Kathleen Wilson-Thompson. They acknowledged concerns about Musk’s divided attention due to his other businesses and political involvement. The directors believe that this new award will “incentivise Elon to remain at Tesla” and ensure his focus on the company’s future.
Musk’s political activities have reportedly had a negative impact on the Tesla 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 called “unprecedented.” This data suggests that Musk’s public image and political affiliations are directly affecting the company’s sales.
The new shares will increase Musk’s ownership stake from 13% to about 15%, giving him greater voting power. Musk has long argued that more control is necessary to protect the company from activist shareholders as it pivots its strategy toward AI and robotics. The board’s letter confirms that the award is designed to gradually increase his influence, cementing his leadership. The new compensation package will be forfeited if the original 2018 deal is reinstated.