Tesla has rewarded CEO Elon Musk with an enormous, restricted inventory bundle that equates to about $29 billion in shares in an effort to retain him as the pinnacle of the corporate.
Additionally it is a bundle that goals to reward Musk for main quite a few Tesla initiatives which have introduced billions in worth for shareholders over the previous seven years. After his 2018 pay bundle was rejected by a Delaware Chancery Courtroom, Musk began to query his future on the firm.
This transfer, carried out by a Particular Committee of the Tesla Board, ought to retain him for a number of years.
🚨 BREAKING: Tesla has introduced that its Board has unanimously accepted a advice from the Particular Committee of the Board to grant Elon an award of restricted inventory equal to roughly one-third of the compensation he earned below the 2018 CEO Efficiency Award.
The… https://t.co/g7RKrTymDL pic.twitter.com/dnvkILlz6H
— TESLARATI (@Teslarati) August 4, 2025
On Monday morning, Tesla shared on X that it had accepted a advice from a Particular Committee comprised of Board Chair Robyn Denholm and fellow board member Kathleen Wilson-Thompson. It aimed to compensate Musk for his “extraordinary work” and reward him after not receiving “significant compensation” for the final eight years.
The submit acknowledged that “Tesla is dedicated to honoring its guarantees within the 2018 CEO Efficiency Award and intends to compensate its CEO for his future providers commensurate along with his contributions to our firm and shareholders, we’ve got really useful this award as a primary step, ‘good religion’ fee to Elon.”
The award contains the next:
- 96 million restricted shares of inventory, topic to Elon paying a purchase order worth upon assembly a two-year vesting time period, to be delivered after receipt of antitrust regulatory approval
- The acquisition worth can be equal to the split-adjusted train worth of the inventory choices awarded to Elon below the 2018 CEO Efficiency Award ($23.34 per share)
- A requirement that Elon serve repeatedly in a senior management position at Tesla in the course of the two-year vesting time period
- A pledging allowance to cowl tax funds or the acquisition worth
- A compulsory holding interval of 5 years from the grant date, besides to cowl tax funds or the acquisition worth (with any gross sales for such functions to be carried out by way of an orderly disposition in coordination with Tesla); and
- If the Delaware courts totally reinstate the 2018 CEO Efficiency Award, this interim award can be forfeited or returned or a portion of the 2018 CEO Efficiency Award can be forfeited. To place it merely, there can’t be any “double dip.” Elon won’t be able to maintain this new award along with the choices he can be awarded below the 2018 CEO Efficiency Award, ought to the courts rule in our favor
The board added:
“The Particular Committee believes now’s the correct time to take decisive motion to acknowledge the extraordinary worth that Elon created for Tesla shareholders. As such, the Board (with Elon and Kimbal Musk recusing themselves) has unanimously accepted a advice from the Particular Committee of the Board to grant Elon an award of restricted inventory equal to roughly one-third of the compensation he earned below the 2018 CEO Efficiency Award.”
Musk and his brother, Kimbal, are each members of the Tesla board. Nevertheless, each Musk brothers recused themselves from any voting on this pay bundle.
The transfer comes as Musk has hinted on a number of events that he’s involved about his management of the corporate. His present stake in Tesla stands at about 12.8 %. He has stated a number of occasions he could be extra snug with a 25 % stake to guard himself towards “activist shareholders.”
He commented on it in the course of the Q2 Earnings Name in late July:
“That could be a main concern for me, as I’ve talked about previously. I hope that’s addressed on the upcoming shareholders’ assembly. However, yeah, it’s a huge deal. I wish to discover that I’ve bought so little management that I can simply be ousted by activist shareholders after having constructed this military of humanoid robots. I feel my management over Tesla, Inc. must be sufficient to make sure that it goes in a great path, however not a lot management that I can’t be thrown out if I am going loopy.”
The pay bundle ought to alleviate any considerations that Tesla would lose Musk as its CEO. Retaining him is maybe the largest step in guaranteeing constant progress is made on a number of fronts, together with AI and Robotics.
