Catenaa, Monday, August 04, 2025- Tesla has granted 96 million new shares worth about $29 billion to CEO Elon Musk, as he fights a court ruling that voided his original pay deal for being unfair to shareholders.
In 2024, a Delaware court voided Musk’s 2018 compensation package, valued at over $50 billion, citing Tesla board’s approval process was flawed and unfair to shareholders.
Musk kicked off an appeal in March against the order, claiming a lower court judge made multiple legal errors in rescinding the record compensation.
Earlier this year, Tesla said its board had formed a special committee to consider some compensation matters involving Musk, without disclosing details.
Tesla is at a turning point as Musk, its largest shareholder with a 13% stake, shifts focus from a promised affordable EV platform to robotaxis and humanoid robots, positioning the company more as an AI and robotics firm than an automaker.
The new award is designed to gradually boost Musk’s voting power, something he and shareholders have consistently said was key to keeping him focused on Tesla’s mission, the special committee said in the filing.
“While we recognize Elon’s business ventures, interests and other potential demands on his time and attention are extensive and wide-ranging … we are confident that this award will incentivize Elon to remain at Tesla,” the committee said in a regulatory filing on Monday.
It added that if the Delaware courts fully reinstate the 2018 CEO Performance Award, the new interim grant will either be forfeited or offset, and there will be no “double dip,” it added.
The interim award shares vest only if Musk remains in a key executive role through 2027. They also come with a five-year holding period, except to cover tax payments or the purchase price.
Musk must pay Tesla $23.34 per share of restricted stock that vests, which is equal to the exercise price per share of the 2018 CEO Award, the company said in Monday’s filing.
Tesla shares rose by about 2% on Monday morning. Shares are down by over 23% so far this year.
