Tesla approves a stock award worth $28 billion for Elon Musk
Tesla, the electric vehicle giant, is currently navigating a complex compensation saga for its CEO, Elon Musk. The company's sales have been declining due to a variety of factors, including the aging of its vehicle range, fierce competition, and Musk's open support for Donald Trump.
The latest development in the compensation saga came in August 2025, when Tesla's board authorized a $29 billion interim pay award to Musk. This "good faith payment" was made amid the ongoing legal limbo, with the Delaware Supreme Court yet to rule on Musk's original $56 billion compensation plan, which was invalidated by a Delaware court in February 2024 due to procedural issues.
The interim award, valued at around $29 billion, is contingent on Musk's continued role at the company. If the original $56 billion award is reinstated, the interim award will be voided, ensuring no "double benefit" for Musk.
The compensation issue has been a constant concern for Tesla shareholders since the Delaware saga began. In January 2018, Tesla's shareholders and board approved Musk’s 10-year, performance-based pay plan with a potential $56 billion payout. However, shareholders challenged the plan’s approval process in Delaware courts, culminating in a 2024 ruling rescinding the plan due to board independence and disclosure issues.
Despite the legal challenges, Musk remains Tesla's main asset. He holds about a 13% stake in the company, making him the largest shareholder. The company's market performance has weakened since the original 2018 plan, with Tesla's stock losing about a quarter of its value since the start of the year.
Tesla's shares rose more than 2% in premarket trading, settling at around $310 per unit on Monday. The company is gradually shifting its focus from affordable electric vehicles to robotaxis and humanoid robots, which could potentially drive future growth.
In a recent conference call, Musk stated that the decrease in subsidies for electric vehicles in the United States could lead to "a few tough quarters" for the company before software and autonomous driving service revenues start to flow in by the end of next year.
The special committee declared that both Musk and shareholders consider the increased voting power essential for him to stay focused on Tesla's mission. The provisionally granted shares to Elon Musk will only be acquired if he retains a leadership position until 2027.
Musk is currently appealing the latest court decision regarding his compensation. The outcome of this appeal could have significant implications for Tesla's future, as well as for executive compensation practices in the tech industry.
[1] Tesla compensation saga timeline
[2] Tesla's interim compensation for Elon Musk
[1] In August 2025, Tesla's board made a good faith interim payment of $29 billion to Elon Musk during the ongoing legal limbo regarding his original $56 billion compensation plan.
[2] This interim payment to Musk was contingent upon his continued role at Tesla, with the original award set to void the interim payment if reinstated to ensure no double benefit for Musk.
