Tesla’s board just handed Elon Musk a $29 billion lifeline to keep him at the company. The new pay package comes after a Delaware court threw out Musk’s original $56 billion compensation plan from 2018. Board members say they need this deal to keep Musk focused on Tesla while tech companies fight for top AI talent.
Tesla’s board approved a $29 billion pay package to keep Musk focused amid fierce competition for AI talent.
The package gives Musk 96 million restricted Tesla shares worth about $300 each. He’ll get these shares if he stays as CEO or in another top job for two years. After that, he must hold the shares for five more years until 2030. Musk will pay $23.34 per share when he gets them, the same price from his canceled 2018 deal.
This new plan doesn’t require Musk to hit any performance goals. The old package made him meet tough targets for Tesla’s growth. Now he just needs to show up for work. If courts give back his original $56 billion package, he’ll have to give up this new one. He can’t have both.
Tesla’s stock went up 2% to $309.26 after the news broke. Some investors think it’s good that Musk’s pay situation is clearer now. But others worry even $29 billion won’t keep his attention on Tesla. They point out he’s busy with SpaceX, his AI company xAI, and working with President Trump’s administration. Meanwhile, Tesla faces declining stock value with shares down over 18% year-to-date despite hitting a $1 trillion market cap in May 2025.
The board says Musk is worth every penny. They believe no one else can lead Tesla’s push into AI and robotics. Musk hasn’t been paid since 2018, though he owns about 13% of Tesla. This new grant would bump his ownership to 15%.
Some shareholders aren’t happy. SOC Investment Group thinks Musk’s too distracted by his other companies. They wonder if any amount of money will make him focus just on Tesla. Over 20 Tesla shareholders have demanded public notice about the November annual meeting, showing growing unrest among investors.
The board calls this a temporary fix while they work on a long-term pay plan. Meanwhile, Musk’s fighting in court to get his original $56 billion package back.