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Tesla's board has approved a new compensation award for CEO Elon Musk, authorizing 96 million shares, valued at approximately US$29 billion, under the same pricing terms as his previously voided 2018 package. The decision marks a calculated attempt to retain Musk's leadership as the company pivots from its electric vehicle roots toward artificial intelligence and robotics.
The move comes months after a Delaware court rescinded Musk's original 2018 pay deal, which had been worth over US$50 billion. The court cited procedural flaws and undue influence, concluding that the board failed to safeguard shareholder interests. Musk's legal team filed an appeal in March, arguing judicial overreach and misinterpretation of corporate governance norms.
In the interim, Tesla's board formed a special committee to reassess executive compensation. Their findings culminated in Monday's approval of the stock award at an exercise price of US$23.34 per share, the same rate as in 2018. At current market valuations, this represents a steep discount, given Tesla stock trades over 1,200% higher.
"We believe this award ensures Elon's continued focus on Tesla's mission," the committee stated in a letter to shareholders. "His leadership is more critical now than ever." Wedbush analyst Dan Ives noted, "This effectively eliminates a major overhang on the stock and locks in Musk's leadership through 2030."
Meanwhile, Tesla faces renewed scrutiny following a Florida jury's decision on Friday that found the company partially liable in a fatal 2019 crash involving Autopilot. The jury awarded $329 million in total damages, of which Tesla is expected to pay over $240 million. The company has announced plans to appeal.
The court ruling arrives as Tesla expands its experimental robotaxi program. Though marketed as autonomous, the service currently requires human operators, prompting criticism regarding the company's portrayal of its AI capabilities. Despite legal setbacks and regulatory pressure, Tesla stock has climbed 27% since April, buoyed by investor confidence in its AI ventures. However, it remains down 25% year-to-date and 38% below its all-time peak of $488.54.
