Tesla Board Backs Musk with $29B Award, Citing Need to Secure His Focus

In a significant move, Tesla’s board of directors has greenlit a new $29 billion stock award for CEO Elon Musk. This decision follows the invalidation of his previous pay package by a U.S. court. The board’s letter to shareholders openly acknowledges worries regarding Musk’s divided attention and political activities, portraying the new award as a strategic solution. The package, framed as a “good faith” payment, grants Musk the right to purchase 96 million shares at the original 2018 price for $2 billion.
The recommendation came from a special committee, which included chair Robyn Denholm and director Kathleen Wilson-Thompson. They labeled the award a “critical first step” to “keeping Elon’s energies focused on Tesla.” The board’s rationale is that this new compensation will incentivize Musk to stay at the helm and ensure his long-term dedication to the company’s vision.
Concerns about the brand’s image have been mounting, with reports suggesting that Musk’s political endorsements and his association with Donald Trump have negatively impacted Tesla’s sales and reputation. A survey from S&P Global Mobility highlighted a significant drop in customer loyalty, with repeat buyers decreasing sharply. An analyst described this decline as “unprecedented,” underscoring the challenges stemming from the CEO’s public persona.
The new shares will boost Musk’s ownership from 13% to about 15%, giving him greater voting power. Musk has long argued that increased control is essential to shield the company from activist shareholders as it shifts its focus toward AI and robotics. The board’s letter confirms that this award is designed to gradually increase his influence, solidifying his leadership. The award will be forfeited if the original 2018 deal is reinstated.