Tesla has approved a new stock award worth approximately $29 billion for CEO Elon Musk, in an effort to keep him leading the company as it pivots further into AI-driven transport and robotics.
The decision follows a court ruling that voided Musk’s earlier $50 billion compensation deal from 2018.
The electric carmaker referred to the payout as an “interim award” — a temporary arrangement to acknowledge Musk’s past performance and retain him in a key leadership role.
The award was offered after the 2018 package was invalidated by a Delaware court on the grounds that the approval process was not conducted independently.
Tesla’s board noted that Musk is crucial to the company’s future.
It described him as central to attracting and retaining top talent, particularly as Tesla evolves beyond electric vehicles into areas such as artificial intelligence, automated mobility, and robotics.
Under the terms of the new deal, Musk will be eligible to receive the share award only if he stays in a top executive position at Tesla for at least two more years.
Additionally, if the Delaware court’s earlier ruling on the 2018 package is overturned on appeal, this new deal would not apply.
The compensation package was reviewed and recommended by a special committee formed by Tesla in 2025.
The committee said the structure of the deal aligns with the company’s long-term goals and reflects Musk’s continuing value despite ongoing legal and market pressures.
The announcement came amid a challenging year for Tesla. In 2025, the company’s sales and profits have declined, and its stock has fallen around 25%.
Rising competition from legacy automakers and Chinese EV brands has weighed on Tesla’s market share.
Despite those challenges, investor sentiment improved slightly following the compensation announcement. Tesla shares rose nearly 2% in early trading.