Tesla’s board of directors has approved a new $29 billion stock award for CEO Elon Musk, a decision explicitly aimed at securing his focus on the company’s new mission of developing robotaxis and humanoid robots. This move comes after a US court invalidated his previous $56 billion pay package. The award is a “good faith” payment, allowing Musk to purchase 96 million shares at the original 2018 price for $2 billion.
In a letter to shareholders, board members Robyn Denholm and Kathleen Wilson-Thompson acknowledged concerns about Musk’s time being divided among his many ventures and political activities. They stated that the new award is a “critical first step” toward “keeping Elon’s energies focused on Tesla” and securing his long-term commitment to the company’s AI-driven future.
Musk’s political endorsements and his relationship with Donald Trump have reportedly damaged the Tesla brand and customer loyalty. A survey from S&P Global Mobility showed a dramatic and “unprecedented” drop in the percentage of Tesla owners who bought another Tesla, a trend that highlights the challenges the company faces beyond just market competition.
The new shares will increase Musk’s ownership stake from 13% to about 15%, giving him greater control. Musk has consistently argued that more voting power is necessary to protect the company from activist shareholders as it pivots its strategy. The board’s letter confirms that the award is designed to gradually increase his influence, ensuring his leadership. This new compensation package will be forfeited if the original 2018 deal is reinstated.