Tesla Inc. has approved a massive stock compensation package for CEO Elon Musk, valued at approximately $30 billion, in a move aimed at securing his leadership for at least two more years. The decision was announced Monday following a board vote and comes amid ongoing legal uncertainty surrounding Musk’s previous, court-revoked pay deal.
Under the new arrangement, Musk is eligible to receive up to 96 million restricted stock options, contingent on him continuing to hold a senior leadership position — such as CEO or head of product and operations — until August 2027. The awarded shares are priced at $23.34 each, the same exercise price as Tesla’s now-voided 2018 compensation plan, and must be held until August 2030.
The board emphasized the importance of retaining Musk, citing his “unique role” in guiding Tesla’s strategic transition into artificial intelligence, robotics, and autonomous systems.
“Elon Musk remains central to Tesla’s innovation engine,” the board said in a statement. “This interim award ensures stable leadership while legal matters over the 2018 package are pending.”
The new grant serves as a temporary solution after a Delaware court nullified Musk’s original $56 billion package in January 2024, ruling it unfair to shareholders. According to regulatory filings, if that original package is reinstated on appeal, the new award will be voided to prevent what the company described as “overcompensation.”
The shares will not be sold or transferred until five years after they are exercised.
Tesla’s stock rose by more than 2% following the announcement. Wall Street analysts largely supported the move, saying it addresses concerns about leadership continuity at a time when the company is under increasing pressure from Chinese EV competitors and slowing global demand.
“Investors need certainty, and keeping Musk at the helm removes a big question mark,” said Dan Ives, managing director at Wedbush Securities. “This award also sends a message that Tesla is doubling down on its long-term roadmap in AI and robotics.”
Tesla’s leadership has been under intense scrutiny over the past year, as Musk has divided his time between Tesla and other ventures including SpaceX, xAI, and his political involvement during the 2024 U.S. election cycle.
Background and Legal Implications
The new equity award follows the formation of a special board committee earlier this year to determine how to compensate Musk fairly while complying with legal restrictions. In addition to the holding requirement and performance conditions, the package avoids immediate dilution for shareholders by tying vesting strictly to time served.
While some shareholder advocates have questioned the size of the new grant, Tesla board members defended the structure, noting it includes no cash component and is entirely performance-linked.
