Elon Musk delivers a speech during the Conservative Political Action Conference (CPAC) held at the Gaylord National Resort & Convention Center in Oxon Hill, Maryland. (AP Photo/Jose Luis Magana, File)
Tesla has granted its CEO, Elon Musk, a massive stock award worth approximately $29 billion, a bold move that comes despite recent struggles with profits, stock dips, and growing political controversies.
On Monday, Tesla announced that Musk will receive 96 million restricted shares. This hefty reward is meant to acknowledge his leadership since 2018—a period Tesla described as “transformative and unprecedented.” The company credited Musk with increasing its market value by $735 billion over the last six years, even as it faces headwinds on multiple fronts.
Musk hasn’t received any pay since 2018 due to a Delaware court rejecting his earlier compensation plan. That package, potentially worth $56 billion, was ruled invalid after a shareholder lawsuit claimed it was designed through unfair negotiations with board members closely aligned with Musk. Although the court reaffirmed this decision in December, Tesla is still appealing.
The new grant, Tesla says, is a way to “keep Musk focused” on the company amid his growing involvement with other ventures like SpaceX and xAI. Musk himself had recently stated that he wanted more control in Tesla to avoid being removed by activist shareholders.
“This is about retaining Elon and rewarding him for the incredible value he's brought to Tesla,” the company explained in a regulatory filing.
Yet, the move comes at a turbulent time. Tesla’s stock has dropped 25% this year, partly due to Musk’s outspoken support of Donald Trump and growing ties with right-wing politics—stances that have alienated a portion of Tesla’s customer base. Investors are also uneasy as Musk spends more time in political circles, fueling concerns that his attention is drifting away from Tesla.
Financially, the company is under pressure. In its latest quarterly results, Tesla’s profits fell dramatically—from $1.39 billion to $409 million. Revenue also slipped, and the numbers failed to meet analysts’ already lowered expectations. Meanwhile, Tesla faces growing competition from both American automakers and fast-rising Chinese EV companies.
To receive his new stock, Musk must pay $23.34 per share, matching the price from his original 2018 package. The new arrangement is not yet immune from legal challenges but is designed to move forward while the previous case remains on appeal.
In response to ongoing scrutiny, Tesla formed a special committee in April to reevaluate Musk’s pay. This effort comes as part of a larger push to address shareholder dissatisfaction and comply with Texas state laws, which require Tesla to hold an annual shareholders’ meeting by November.
Many shareholders have been vocal about their frustrations, especially after Tesla’s market value tumbled. A group of over 20 investors recently urged the company to announce the annual meeting formally.
Still, some analysts see the stock grant as a stabilizing step. Dan Ives from Wedbush noted the package could help assure investors that Musk is committed to Tesla for the long haul.
“Musk is Tesla’s biggest asset. This stock award likely keeps him in the CEO seat through 2030,” Ives said.
Following the announcement, Tesla’s shares saw a modest uptick of nearly 2% during Monday’s midday trading session.
