Tesla Board Awards Musk $29B to Prevent ‘Activist Shareholders’ from Ousting Him

Tesla’s board of directors has approved a new $29 billion stock award for CEO Elon Musk, a move that is intended to increase his voting power and protect him from activist shareholders. This decision comes after a US court invalidated his previous $56 billion pay package from 2018. The new award is a “good faith” payment, allowing Musk to purchase 96 million shares at the original 2018 price for $2 billion.
In a letter to shareholders, board members Robyn Denholm and Kathleen Wilson-Thompson acknowledged concerns about Musk’s divided attention, citing his numerous other ventures and political activities. They stated that the new award is a “critical first step” toward “keeping Elon’s energies focused on Tesla” and securing his long-term commitment to the company’s AI and robotics future.
Musk’s political endorsements and his relationship with Donald Trump have reportedly damaged the Tesla brand and sales. A survey from S&P Global Mobility showed a sharp and “unprecedented” decline in customer loyalty, with the percentage of repeat buyers falling significantly. This data highlights the challenges the company faces due to its CEO’s public persona.
The new shares will increase Musk’s ownership stake from 13% to approximately 15%. This increase in voting power is a key demand from Musk, who has said he needs more control to prevent being pushed out by activist shareholders. The board’s letter confirms that the award is designed to gradually increase his influence, ensuring his leadership. This new compensation package will be forfeited if the original 2018 deal is reinstated.