TESLA ANNOUNCES $29 BILLION INTERIM PAY PACKAGE FOR ELON MUSK AMID LEGAL BATTLE AND AI TALENT WAR
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By Aishat Momoh. O.
Tesla has approved an interim compensation package worth approximately $29 billion for CEO Elon Musk, aiming to secure his leadership as the company pivots from electric vehicles to artificial intelligence and robotics.
In a statement released Monday, Tesla said it would award Musk 96 million shares in a “good faith” move while a longer-term CEO compensation plan is being developed. The decision comes as the company appeals a Delaware court ruling that invalidated a previous \$55.8 billion pay package granted in 2018.
“Retaining Elon is more important than ever before,” read a letter to shareholders signed by board members Robyn Denholm and Kathleen Wilson-Thompson. “We have recommended this award as a first step, ‘good faith’ payment.”
The board emphasized Musk’s role as a critical force in attracting top engineering talent, noting that Tesla is undergoing a strategic shift from a focus on electric vehicles to becoming a leader in AI, robotics, and related services. Competition from tech giants like Google and Meta in the AI space has intensified pressure on Tesla to retain key talent.
Musk, who already holds around 13 percent of Tesla’s stock, has raised concerns over his influence at the company. On a July 23 earnings call, he stated, “My control over Tesla should be enough to ensure that it goes in a good direction, but not so much control that I can’t be thrown out if I go crazy.”
The latest compensation move comes amid growing scrutiny of Musk’s leadership, as Tesla grapples with declining sales and profit margins. The poor performance of the much-hyped Cybertruck and a limited rollout of new vehicle models have also raised concerns.
Though the statement did not reference Musk’s polarizing political engagements, which have drawn boycotts and vandalism, the board letter subtly acknowledged them, suggesting the pay package is designed to refocus Musk’s energy on Tesla.
If the court eventually upholds the 2018 pay deal, Musk will forfeit the new award. Nevertheless, the \$29 billion package is expected to stir debate over executive compensation and board oversight, especially as Musk remains the world’s richest man.
Tesla shares rose 2.4 percent in early trading on Monday following the announcement.
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