Tesla awards Elon Musk $29 billion in interim compensation amid leadership, talent concerns
Published: 06 August 2025, 2:32:13
Tesla has granted Elon Musk an interim pay package worth approximately $29 billion, signaling its determination to retain its high-profile CEO as the company navigates increasing pressure from shareholders, intensifying competition in artificial intelligence, and internal challenges.
The electric vehicle maker announced Monday that it would award Musk 96 million Tesla shares as a “good faith” step while it continues to appeal a Delaware court ruling that voided his previous $55.8 billion pay package from 2018. The company said the interim award is intended to reflect Musk’s future contributions and to keep him focused on Tesla’s strategic priorities.
“We have recommended this award as a first step,” Tesla board members Robyn Denholm and Kathleen Wilson-Thompson wrote in a letter to shareholders. “Retaining Elon is more important than ever before.”
Compensation amid shifting focus and uncertainty
Tesla is currently repositioning itself from being primarily a car manufacturer to becoming a major player in artificial intelligence, robotics, and related services. In this context, the board called Musk a “magnet for hiring and retaining talent,” citing the need to stay competitive with companies like Google and Meta that are aggressively recruiting in the AI space.
Despite Musk’s prominence and prior success with Tesla and SpaceX, his leadership has come under scrutiny. Tesla has experienced declining sales and profits in recent quarters, alongside disappointing performance of the long-awaited Cybertruck.
During Tesla’s July earnings call, Musk warned of upcoming “rough” quarters and voiced concerns over his level of control in the company. Holding roughly 13% of Tesla shares before Monday’s award, he expressed a desire for enough influence to steer Tesla’s direction—while still remaining accountable.
Controversy and legal backdrop
The new compensation package comes as Tesla continues its legal battle to reinstate the 2018 pay deal, which was invalidated by a Delaware court earlier this year. Should Musk win the appeal and the original $55.8 billion package be reinstated, he would be required to forfeit the newly granted $29 billion award.
The interim award is likely to draw criticism from those concerned about executive pay and corporate governance. Musk, already the world’s richest person, has faced increasing backlash over his political involvement and public behavior, which some investors argue have hurt Tesla’s brand and stock value.
While Monday’s statement avoided direct mention of Musk’s polarizing political views, the shareholder letter hinted at worries over his attention being divided across multiple ventures, including SpaceX, xAI, and his ownership of X (formerly Twitter). The package, the letter said, is aimed at “keeping Elon’s energies focused on Tesla.”
Despite the controversies, investors responded positively, with Tesla shares rising 2.4% in early trading Monday.
