Tesla awards CEO Musk millions of shares valued at about $29 billion
[August 05, 2025] By
MICHELLE CHAPMAN
Tesla gave Elon Musk a stock grant of $29 billion on Monday as a reward
for years of “transformative and unprecedented" growth despite a recent
foray into right-wing politics that has hurt its sales, profits and its
stock price.
In giving its billionaire CEO 96 million in restricted shares, the
electric car company noted that Musk hasn't been paid in years because
his 2018 compensation package has been rejected by a Delaware court. The
award comes eight months after a judge revoked the 2018 pay package a
second time. Tesla has appealed the ruling.
Tesla on Monday called the grant a “first step, good faith” way of
retaining Musk and keeping him focused, citing his leadership of SpaceX,
xAI and other companies. Musk said recently that he needed more shares
and control so he couldn't be ousted by shareholder activists.
“Rewarding Elon for what he has done and continues to do for Tesla is
the right thing to do,” the company said in a regulatory filing, citing
an increase of $735 billion in Tesla's value on the stock market since
2018.
Tesla shares have plunged 25% this year largely due to blowback over
Musk’s affiliation with President Donald Trump. But Tesla also faces
intensifying competition from both the big Detroit automakers, and from
China.
In its most recent quarter, Tesla reported that quarterly profits
plunged from $1.39 billion to $409 million. Revenue also fell and the
company fell short of even the lowered expectations on Wall Street.
Investors have grown increasingly worried about the trajectory of the
company after Musk had spent so much time in Washington this year,
becoming one of the most prominent officials in the Trump administration
in its bid to slash the size of the U.S. government.
The electric vehicle maker said in the regulatory filing that Musk must
first pay Tesla $23.34 per share of restricted stock that vests, which
is equal to the exercise price per share of the 2018 pay package.
In December Delaware Chancellor Kathleen St. Jude McCormick reaffirmed
her earlier ruling that Tesla must revoke Musk’s multibillion-dollar pay
package. She found that Musk engineered the landmark pay package in sham
negotiations with directors who were not independent.
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Elon Musk speaks at the Conservative Political Action Conference,
CPAC, at the Gaylord National Resort & Convention Center, Thursday,
Feb. 20, 2025, in Oxon Hill, Md. (AP Photo/Jose Luis Magana, File)
 The rulings came in a lawsuit filed
by a Tesla stockholder who challenged Musk’s 2018 compensation
package.
That pay package carried a potential maximum value of about $56
billion, but that sum has fluctuated over the years based on Tesla’s
stock price.
Musk appealed the order in March. A month later Tesla said in a
regulatory filing that it was creating a special committee to look
at Musk’s compensation as CEO.
Musk has been one of the richest people in the world for several
years.
Wedbush analyst Dan Ives feels Musk's stock award may alleviate some
Tesla shareholder concerns.
“We believe this grant will now keep Musk as CEO of Tesla at least
until 2030 and removes an overhang on the stock,” Ives wrote in a
client note. “Musk remains Tesla’s big asset and this comp issue has
been a constant concern of shareholders once the Delaware soap opera
began.”
Under pressure from shareholders last month, Tesla scheduled an
annual shareholders meeting for November to comply with Texas state
law.
A group of more than 20 Tesla shareholders, which have watched Tesla
shares plummet, said in a letter to the company that it needed to at
least provide public notice of the annual meeting.
Tesla's stock rose nearly 2% in midday trading.
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