Tesla grants CEO Elon Musk $29 billion in new shares to ‘incentivise’ him

In March, Musk began appealing the Delaware court decision that scrapped his 2018 pay package, claiming the judge made multiple legal errors. The court had found that the process behind the original deal was flawed and lacked proper independence. In response, Tesla’s board created a special committee to explore new compensation options, though it revealed little at the time. Now, that committee has made its move.

The new deal comes with caveats. Musk must pay $23.34 per share of vested stock—the same exercise price as his previous 2018 package. If the courts eventually reinstate the original pay deal, Monday’s award will be voided or offset to avoid what Tesla calls a “double dip.” Musk will also be required to hold the shares for five years, unless selling to pay taxes or the purchase price.

Tesla shares rose more than 2 per cent in premarket trading on the news.

But the stakes extend far beyond shareholder value. Tesla is no longer positioning itself primarily as a carmaker. Musk is steering it toward becoming an AI and robotics company, focused on robotaxis and humanoid machines rather than affordable electric vehicles, an abrupt shift away from the mass-market EVs he once promised.

Meanwhile, the company is in a precarious position. Tesla stock is down about 25 per cent his year, as buyers turn to newer EVs from rivals like Hyundai and BMW. The Cybertruck, its first new vehicle since 2020, has fallen flat despite Musk’s earlier prediction of hundreds of thousands of annual sales.

The Trump administration’s cuts to EV subsidies have added to the pressure, stripping Tesla of tax credits and regulatory revenue it once relied on. Musk, in a post-earnings call last month, warned of “a few rough quarters” before expected income from self-driving software begins to roll in.

The political backlash has been particularly sharp. Data from S&P Global Mobility, shared with Reuters, shows that Tesla’s brand loyalty plummeted after Musk endorsed US President Donald Trump last summer. Activists have protested at Tesla dealerships across the country. Trump’s proposed policy agenda would strip Tesla of federal support entirely, worsening the hit from slowing EV demand.