Tesla awarded CEO Elon Musk a massive stock grant valued at $29 billion on Monday, recognizing his role in driving extraordinary growth at the company despite recent controversies linked to his political involvement that have negatively impacted Tesla’s sales, profits, and stock value.
The electric vehicle manufacturer granted Musk 96 million restricted shares, highlighting that he has not received any salary for years due to a Delaware court’s rejection of his 2018 compensation package. This latest award arrives eight months after a judge invalidated that pay plan for the second time. Tesla is currently appealing the court’s decision.
The company described the stock grant as a “good faith first step” to retain Musk and keep him focused on Tesla, SpaceX, xAI, and his other ventures. Musk recently emphasized the need for more shares and greater control to prevent shareholder activists from removing him from leadership.
Tesla stated in regulatory filings that rewarding Musk is justified by the company’s extraordinary increase in market value — surging by $735 billion since 2018.
However, Tesla’s shares have fallen 25% this year amid backlash over Musk’s association with former President Donald Trump. The company also faces growing competition from major Detroit automakers and Chinese manufacturers.
Tesla’s latest quarterly earnings reflected these challenges, with profits dropping from $1.39 billion to $409 million. Revenues also declined, and the company failed to meet even the reduced expectations set by Wall Street analysts.
Investors have grown concerned about Tesla’s direction as Musk has devoted significant time to political activities in Washington, becoming a notable figure in efforts to reduce the size of the federal government under Trump’s administration.
According to Tesla’s filing, Musk must pay Tesla $23.34 per share for the restricted stock that vests, matching the exercise price tied to the 2018 compensation plan.
In December, Delaware Chancellor Kathleen St. Jude McCormick upheld her earlier ruling requiring Tesla to revoke Musk’s multibillion-dollar pay package, determining it was engineered through questionable negotiations with non-independent board members. This legal challenge was initiated by a Tesla shareholder contesting the 2018 pay deal.
Originally valued at a potential $56 billion, Musk’s 2018 compensation package’s worth has fluctuated alongside Tesla’s stock price.
Musk appealed the decision in March. The following month, Tesla announced the formation of a special committee to review the CEO’s compensation structure.
Musk has consistently ranked among the world’s wealthiest individuals for several years.
Wedbush analyst Dan Ives believes this new stock award might ease concerns among Tesla shareholders. In a client note, he suggested the grant could secure Musk’s leadership at Tesla through 2030 and remove uncertainty that had weighed on the stock since the Delaware legal disputes began. Ives described Musk as Tesla’s “biggest asset.”
Following shareholder pressure last month, Tesla scheduled its annual meeting for November to comply with Texas state laws. Over 20 shareholders, concerned about the recent decline in Tesla’s stock price, requested that the company publicly announce the meeting date.
Following the news of the stock grant, Tesla shares gained nearly 2% during midday trading.
Also Read:
Tesla Shares Slide 7% Amid Renewed Clash Between Musk and Trump
