Tesla Awards CEO Elon Musk $29 Billion in Shares Amid Legal Battle
August 4, 2025 – Tesla has granted CEO Elon Musk 96 million shares of restricted stock valued at approximately $29 billion, a move that comes just six months after a Delaware court ordered the company to revoke his previous multibillion-dollar compensation package. The electric vehicle giant announced the award in a regulatory filing on Monday, stating that Musk must pay $23.34 per share for the restricted stock as it vests, matching the exercise price of his 2018 compensation deal.
The new award aims to secure Musk’s leadership as Tesla navigates a pivotal shift from its core automotive business to ambitious ventures in robotaxis and humanoid robotics. Tesla’s special committee emphasized that the grant is a “good faith” payment to honor the 2018 package, which was struck down by Delaware Chancellor Kathaleen St. Jude McCormick in 2024. The court ruled that the original $56 billion package—unprecedented in scale—was engineered through flawed negotiations with non-independent directors, deeming it unfair to shareholders.
Musk appealed the ruling in March, arguing the judge made multiple legal errors. Tesla responded by forming a special committee to reassess Musk’s compensation, leading to this interim award. The committee stated, “While we recognize Elon’s business ventures and demands on his time are extensive, we are confident this award will incentivize him to remain at Tesla.” The shares vest only if Musk stays in a key executive role through 2027 and come with a five-year holding period, except for tax payments or the purchase price. If the 2018 package is reinstated by the courts, the new grant will be forfeited or offset to avoid duplication.
The decision has sparked mixed reactions. Wedbush analyst Dan Ives called it a positive step, noting, “This grant will keep Musk as CEO until at least 2030 and removes an overhang on the stock.” Tesla shares rose over 2% in premarket trading following the announcement. However, critics, including Charles Elson of the University of Delaware, argue the award is “a repackaged version of what was ruled improper,” raising concerns about governance.
Tesla faces challenges beyond the compensation saga. The company reported a sharp profit drop from $1.39 billion to $409 million in its latest quarter, with revenue falling short of Wall Street’s lowered expectations. Shares have plunged 25% this year, driven by Musk’s political affiliations, including his endorsement of President Donald Trump, and intensifying competition from Detroit and Chinese automakers. Tesla’s aging vehicle lineup and the underperforming Cybertruck have further strained its market position.
As Tesla pivots to AI and robotics, Musk’s leadership remains central to its vision. The upcoming shareholder meeting on November 6 will vote on a longer-term compensation plan, signaling ongoing debates about his role and rewards. For now, the $29 billion award underscores Tesla’s commitment to keeping Musk at the helm during a turbulent time.