Tesla grants Elon Musk $29bn in shares to secure long-term leadership

Tesla has awarded CEO Elon Musk a new stock package valued at $29 billion to reinforce his commitment to the company. Tesla states this grant is designed to incentivise Musk to remain at the helm and strengthen his voting power.

The move includes 96 million shares, purchasable at $23 each, far below the current market price of over $300 per share. The goal is to secure Musk’s influence amid mounting pressures on Tesla’s sales and ongoing legal scrutiny. In other words, the company wants to use the package of over 96 million Tesla shares to prevent Elon Musk from resigning so that he can focus fully on other projects or politics.

“While we recognize that Elon’s business ventures, interests and other potential demands on his time and attention are extensive and wide-ranging […] we are confident that this award will incentivize Elon to remain at Tesla and focus his unmatched leadership abilities on further creating shareholder value for Tesla shareholders and attracting and retaining talent at Tesla,” is says in the official “Letter to Our Shareholders”.

In the SEC filing, Tesla also states that the share package could strengthen Musk’s voting rights at the company, enhancing his influence not only as CEO but also as a major individual shareholder. However, the option to acquire the new shares will only apply if Musk retains a key role at Tesla until at least 2027. Even then, a five-year holding period applies, meaning Musk could not monetise the package before 2032.

The ongoing legal proceedings in Delaware regarding Musk’s 2018 compensation package also remain relevant. That agreement would have granted Musk shares worth $50 billion. However, in 2024—when the shares were set to vest—a Delaware court declared the deal invalid, citing procedural flaws and shareholder disadvantage. Musk has appealed the ruling.

If the 2018 agreement is ultimately reinstated in full, the new share package will either be voided or offset to prevent double compensation, according to Tesla.

Following the announcement, Tesla shares rose by two per cent. Analysts viewed the move positively, interpreting it as a step towards resolving uncertainty over Musk’s future at the company. While some analysts and investors have recently seen Musk’s political activity as a liability, few automakers are as closely tied to their CEO as Tesla. For many, despite the criticism, Tesla without Musk remains difficult to imagine.

tesla.com (SEC filing), reuters.com