Tesla Grants Elon Musk a $29 Billion Incentive Package Approval
Tesla Offers Elon Musk a New $29 Billion Compensation Package Amidst Legal Disputes
Tesla has announced a new compensation package for its CEO, Elon Musk, worth $29 billion. This replaces the previous 2018 pay plan, which has been voided by the Delaware court twice and is currently the subject of ongoing legal disputes.
The new package grants Musk about 96 million restricted shares that he can buy at a strike price of $23.34 per share. With Tesla's stock currently trading above $300 per share, this new deal creates a large built-in value of around $280 per share.
The deal has a "floor-and-ceiling" structure linked to the ongoing litigation in Delaware. If the courts again cancel Musk's original 2018 award of 303 million stock options, he retains this new $29 billion award. However, if any part of the original grant is reinstated, the new award's size will shrink accordingly.
This new package would give Musk nearly a 16% stake in Tesla, valued at upwards of $150 billion at current stock prices. However, some investors remain skeptical that even this sizable equity incentive will guarantee Musk’s full dedication to Tesla’s turnaround, especially amid recent challenges in Tesla’s sales and performance.
The new compensation package is contingent on Musk remaining CEO or fulfilling key executive duties for at least two years. It is designed to take Tesla to the next level and incentivize Musk to stay with the company.
It is important to note that the voided package included options for 303 million shares and was tied to Tesla’s financial and market results. The legal disputes regarding this voided compensation package are ongoing.
Elon Musk currently holds around 13% stake in Tesla, the largest individual stake but not enough for controlling power. His departure from Tesla could mean losing a leader who attracts and retains talented employees.
Tesla shares are up 2% in pre-market trading on August 4. The exact terms and amount of the payment in the new compensation package are not specified.
[1] CNBC (2025). Tesla gives Elon Musk a new $29 billion compensation package. Retrieved from https://www.cnbc.com/2025/08/04/tesla-gives-elon-musk-a-new-29-billion-compensation-package.html
[2] Reuters (2025). Analysis: Tesla's new Elon Musk pay plan is a gamble. Retrieved from https://www.reuters.com/business/tesla-new-elon-musk-pay-plan-gamble-2025-08-04/
[3] Bloomberg (2025). Tesla's New Elon Musk Compensation Plan: What You Need to Know. Retrieved from https://www.bloomberg.com/news/articles/2025-08-04/tesla-s-new-elon-musk-compensation-plan-what-you-need-to-know
- The new $29 billion compensation package for Elon Musk, as announced by Tesla, is a significant development in the realm of finance and business, as it could potentially increase Musk's stake in the company to nearly 16%.
- The recent legal disputes regarding Elon Musk's previous compensation package have influenced the structure of Tesla's new business deal, with the new package having a "floor-and-ceiling" provision linked to the ongoing litigation in Delaware.
