Musk wins multibillion-dollar pay package from Tesla

Tesla really, really wants to keep Elon Musk happy. Even after some investors in recent months expressed concern about Musk’s commitment to the electric vehicle company as he threw himself into politics in support of President Donald Trump’s agenda and the brand’s performance suffered, Tesla’s board has proposed a new compensation package for its cofounder — and it’s worth more than $29 billion, based on the current value of Tesla stock. Think of the proposed 96 million restricted shares he’ll get as a “good faith” award that will “incentivize and retain” the world’s richest person as CEO, board members explained.

What Tesla board members said

Tesla board members Robyn Denholm and Kathleen Wilson-Thompson explained in a letter to shareholders that the new compensation package was necessary because “the war for AI talent is intensifying, with recent months including multi-billion-dollar acquisitions of companies and nine-figure cash compensation packages for non-founder, individual AI engineers,” Business Insider reported. “Even among this group of highly talented individuals, no one matches Elon’s remarkable combination of leadership experience, technical expertise, and, arguably most importantly, decades-long proven track record of building the most revolutionary and profitable businesses across different industries,” they added, noting that the board’s vote to approve the package — the SpaceX CEO and brother Kimbal Musk recused themselves — was unanimous.

Previous pay package issues

The news about the former DOGE leader’s new payday comes months after a Delaware judge struck down Tesla’s proposed 2018 compensation package for the CEO — that one was worth $50 billion — ruling that the billionaire’s close ties with board members and his large stake in the company had undermined the award process. That one, had it gone through, would have made Musk the highest-paid executive ever. Tesla and Musk — who’s appealing the decision — have both been critical of the judge’s ruling. “Shareholders should control company votes, not judges,” Musk wrote in a December 2024 post on X.com, the social media site he owns.

More pay package terms revealed

Tesla board members said in a Securities and Exchange Commission filing that Musk’s new $29 billion award would include a requirement that he serve, continuously, in a senior leadership role at Tesla during the two-year vesting term, Business Insider reported. Additionally, the package is structured to incrementally increase Musk’s voting rights. Last year, he explained why more control was important to him. “I am uncomfortable growing Tesla to be a leader in AI [and] robotics without having ~25% voting control. Enough to be influential, but not so much that I can’t be overturned,” he wrote on X. “Unless that is the case, I would prefer to build products outside of Tesla.”

No risk of double-dipping

According to the Tesla board, if Musk wins his legal appeal and his 2018 pay package is reinstated, he won’t “double-dip.” In that case, he would return or forfeit his new $29 billion package. Shareholders also have the option of deciding on a longer-term CEO compensation strategy for Musk, which they can vote on at Tesla’s annual shareholder meeting in November.

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