Tesla Awards Elon Musk $30 Billion Stock Package to Secure His Focus

Tesla’s board has approved a $30 billion interim stock award for CEO Elon Musk, a massive payout aimed at keeping the billionaire focused on the electric vehicle maker amid a legal battle over his 2018 compensation package. The new deal, announced on August 4, grants Musk 96 million shares at an exercise price of $23.34, vesting if he remains in a senior leadership role for two years.

Details of the Award

The package, valued at approximately $29 billion after Musk pays $2.24 billion to acquire the shares, responds to concerns about his divided attention across ventures like SpaceX, xAI, and political activities, including his support for Donald Trump’s campaign. Tesla’s board, led by Chair Robyn Denholm and Kathleen Wilson-Thompson, called it a “good faith” payment to honor the voided 2018 deal, which was worth up to $56 billion before a Delaware court struck it down in 2024 for unfair processes. The new award, governed by Texas law after Tesla’s reincorporation, requires Musk to hold the shares for five years and will be forfeited if the 2018 package is reinstated on appeal.

Tesla’s stock has fallen 25% in 2025, compared to a 6% S&P 500 gain, amid declining sales, an aging vehicle lineup, and backlash over Musk’s political stances. Second-quarter revenue dropped 12% to $22.5 billion, missing estimates. The board emphasized Musk’s critical role in Tesla’s pivot to AI, robotaxis, and humanoid robots, citing an “intensifying AI talent war.” Some investors, like Wedbush analyst Dan Ives, praised the move for removing uncertainty, with shares rising 2.7% to $310.80 premarket on August 4.

Implications

The award boosts Musk’s stake from 13% to about 15%, strengthening his grip on Tesla as he pushes for greater control to fend off activist shareholders. Critics argue the board’s lack of independence and the package’s size could spark new legal challenges, especially given Tesla’s struggles in China, where July shipments from its Shanghai factory fell 8.4% to 67,886 vehicles. The board plans to propose a long-term compensation plan at Tesla’s November 6 shareholder meeting.

Developing Story

As Tesla navigates legal and market headwinds, the award aims to lock in Musk’s leadership but risks reigniting debates over governance and his focus. Further updates on the Delaware appeal and Tesla’s performance may shape the outcome. Note: Details are based on recent reports; the situation may evolve rapidly.