Musk gets billions in new Tesla stock — and, gradually, even more voting power — while legal challenges to his old compensation deal drag on
Allison Robbert / AFP via Getty Images
Elon Musk hasn’t collected a dollar in meaningful Tesla $TSLA pay since 2017. On Monday, that changed — sort of. According to an SEC filing, Tesla’s board just approved a stock award worth around $29 billion, granting Musk 96 million restricted shares under the company’s long-term incentive plan.
The grant comes as a kind of stopgap, designed to keep Musk tethered to Tesla while the company fights to reinstate his original $56 billion compensation package — the one a Delaware judge voided earlier this year for being negotiated by a board that “did not act in the best interests of the company,” and was effectively beholden to Musk (acting like “supine servants” to an “overweening master”). The re-vote that followed, pushed through with Musk’s shares temporarily sidelined, passed easily — but that case is still on appeal.
The board, however, acting through a special committee of “disinterested” directors, appears unwilling to wait. The new grant mirrors roughly a third of Musk’s original pay package, with shares vesting over two years if Musk stays on as CEO or remains a senior executive involved in product development or operations. If the original 2018 plan is reinstated, this one is forfeited. Until then, it functions less like a reward and more like an insurance policy. The new plan gives Musk plenty of leeway to step back from day-to-day leadership without technically violating the deal.
It also cements his control over the company. The award gradually grants Musk additional voting power, meaning his influence in the company is further consolidated at a time when both investors and regulators have questioned whether Tesla’s board is independent in name only.
Tesla, for its part, framed the move as a strategic necessity. And in a note to clients, Wedbush analyst Dan Ives — a longtime Musk fan and Tesla bull — said the award works to “remove an overhang on the stock” and signals that Musk is locked in through at least 2030. “Retaining Musk [is] a Must,” Ives wrote, calling him the company’s “top asset” as Tesla pivots toward becoming an AI-first firm. But not all shareholders will see it that way.
Musk’s attention has increasingly drifted toward outside ventures — SpaceX, xAI, X $TWTR (formerly Twitter), political causes and parties — making even longtime investors uneasy. Over the past year, Musk has aligned himself more closely with right-wing figures, reinstated banned users on X, and openly feuded with regulators, including the SEC. He also threatened to move Tesla’s legal incorporation out of Delaware after the court struck down his original pay deal — a move that ultimately passed in Texas earlier this year.
The Tesla committee said in the regulatory filing, “While we recognize Elon’s business ventures, interests and other potential demands on his time and attention are extensive and wide-ranging ... we are confident that this award will incentivize Elon to remain at Tesla.”
On the first-quarter earnings call, Musk — then at the helm of the controversial Department of Government Efficiency — pledged to devote “far more of my time to Tesla.” Rumors of the board looking to replace Musk were seen at the time as a “warning shot” by Ives.
Musk, the company’s largest shareholder, said on Tesla’s recent earnings call that the fact that he only has a 13% stake in the company is a “major concern” and that he’s worried about being ousted by activist investors. He hopes, he said, that his stake will be addressed at the November shareholder meeting. “I think 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,” Musk said.
The CEO threatened to walk away from Tesla in 2024 unless his control of the company increased. The now-voided 2018 pay package would have increased Musk’s stake in the company to 20%.
Meanwhile, Tesla’s core business has struggled. Vehicle deliveries fell sharply in the second quarter, margins have compressed, and competition in China has eroded the company’s early lead. The stock is down 18.6% year to date. Musk has promised to reinvent Tesla as an AI-first company, with robotaxis, humanoid robots, and Full Self-Driving as the next frontier — but the timeline for those efforts remains murky. So, to get to that long-promised future, Tesla’s board just cut Musk another multibillion-dollar check. But analysts have warned that investor patience may run thin if real financial returns don’t follow the hype.
Still, Tesla’s stock ticked up in Monday morning trading (around 2% as of 10 a.m. ET) as investors welcomed the resolution of a long-running uncertainty. “This was all included in our 3 step list mentioned in early July where the Board of Directors had to step in to ensure Musk would commit to Tesla over the next few years with some general guardrails put in place to keep TSLA’s most important asset,” Ives wrote.
Exactly how sturdy those guardrails are remains to be seen. With the November shareholder meeting looming and legal battles continuing, Tesla’s governance issues aren’t going away. But for now, Musk has what he wants: more stock, more control, and one less thing to distract from his growing empire.
Join 500,000+ readers who start their day with Quartz.
By subscribing, you agree to our Terms of Service and Privacy Policy.
