Tesla grants Musk massive pay deal to keep CEO on board amid legal battle
On Monday, Tesla granted CEO Elon Musk a new $29 billion pay deal aimed at keeping the billionaire entrepreneur at the helm as the company pivots from its struggling electric vehicle business to robotaxis and humanoid robots.
The company described the "interim award" of 96 million new shares as a "good faith" payment to honor the more than $50 billion pay package from 2018 that was struck down by a Delaware court last year.
Under the terms of the award, Musk can claim the shares if he remains a top executive at Tesla for another two years and a court doesn't reinstate the 2018 package that is currently under appeal.
Musk also has to hold the shares for five years and can buy them for $23.34 per share, the same as the exercise price of his 2018 award.
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Tesla is also planning to put forward a longer-term CEO compensation plan at its annual investor meeting on Nov. 6.
The move is intended to keep Musk, the public face of Tesla and the architect of its robotaxi strategy, focused on the EV maker as it undergoes a strategic pivot.
It also comes amid speculation that the Tesla board's patience with Musk could be wearing thin because of the billionaire's political activism and tumultuous time working with the Trump administration.
Sales have been falling at the company amid a tough competitive landscape and a stagnant vehicle lineup.
Musk's political involvement and his wider business empire – including artificial intelligence startup xAI and space exploration firm SpaceX – have also prompted concerns about his focus on Tesla, which is the main source of his wealth. He has threatened to leave the company unless he gets more control over Tesla.
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With the new stock award, Musk's stake in Tesla would grow from its current level of 12.7%, the largest among stockholders, to 15%, according to Reuters calculations based on data compiled by LSEG.
The move to give Musk more significant control of the company's board still sees him as the best-suited leader to address the company's challenges in the years ahead.
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Prior to Monday's grant, Musk had no active compensation plan, and Tesla said he hadn't received meaningful pay since 2017.
The board said that with the legal fight over the 2018 package expected to continue, the interim award is a means of retaining Musk's "extraordinary talent."
Reuters contributed to this report.