Elon Musk receives a significant $29 billion stock bonus from Tesla.
Elon Musk, the CEO of Tesla, has been granted a new compensation package worth $29 billion in the form of a stock award. This new deal, which was announced in August 2025, replaces the $50 billion pay package from 2018 that was struck down by a Delaware court [1][2].
The new award is contingent on Musk continuing to serve as a top executive at Tesla for another two years and holding the shares until 2030, at which point he can purchase them at the exercise price of $23.34 per share. This interim award is intended to retain Musk's leadership during the ongoing legal appeal regarding the 2018 package and the company's strategic pivot to robotaxis and AI [1][2].
In contrast to the original 2018 package, which required significant shareholder value creation hurdles, the new award is simpler. Musk only needs to remain employed and hold the shares to receive the award. This new deal is expected to increase Musk's ownership stake from about 13% to 15%, making him the highest-paid CEO historically by a large margin [1].
Tesla plans to propose a longer-term compensation plan at its upcoming annual investor meeting. The board emphasizes that retaining Musk is critical due to the intensifying competition for AI and robotics talent [1][2].
Charles Elson, the founding director of the Weinberg Centre for Corporate Governance at the University of Delaware, has stated that the new package is a repackaged version of what was done years ago and was ruled improper by a judge. However, the award suggests that directors still see Musk as best-suited to tackle Tesla's challenges in the years ahead [1].
The news of the new compensation package has been met with enthusiasm by investors and analysts, with Tesla shares rising nearly 2% in early trading [1]. The company will not record compensation expense for the award until it determines that the performance condition is likely to be met [2]. Additionally, the new shares will be forfeited or offset if the Delaware courts fully reinstate the 2018 stock award, ensuring there is no "double dip" [2].
The award comes at a critical time for Tesla, as the company shifts its focus from electric cars to robotaxis and humanoid robots. Musk has been urged to stay focused on Tesla to ensure its continued success in these new areas [1]. If Musk were to leave Tesla, he would be throwing away a significant portion of his net worth, as he owns more than 15% of the company [1].
References: [1] Reuters. (2025, August). Tesla awards Elon Musk $29 billion stock award as part of new compensation package. [online] Available at: https://www.reuters.com/technology/tesla-awards-elon-musk-29-billion-stock-award-part-new-compensation-package-2025-08-01/ [2] CNBC. (2025, August). Tesla grants Elon Musk $29 billion stock award as part of new compensation package. [online] Available at: https://www.cnbc.com/2025/08/01/tesla-grants-elon-musk-29-billion-stock-award-as-part-of-new-compensation-package.html
- The CEO of Tesla, Elon Musk, was granted a new compensation package worth $29 billion, replacing the $50 billion package from 2018 that was previously struck down.
- This new deal, announced in August 2025, is contingent on Musk serving as a top executive at Tesla for another two years and holding the shares until 2030.
- The new award is simpler compared to the original package and Musk only needs to remain employed and hold the shares to receive the award.
- Tesla plans to propose a longer-term compensation plan at its upcoming annual investor meeting, emphasizing the importance of retaining Musk due to intensifying competition for AI and robotics talent.
- Charles Elson, the founding director of the Weinberg Centre for Corporate Governance, has stated that the new package is a repackaged version of the 2018 award, which was ruled improper by a judge.
- The news of the new compensation package has been met with enthusiasm by investors and analysts, with Tesla shares rising nearly 2% in early trading.
- The award comes at a critical time for Tesla, as the company shifts its focus from electric cars to robotaxis and humanoid robots, urging Musk to stay focused on Tesla to ensure its continued success in these new areas.
