The board of directors at Tesla has approved a new $29 billion stock award for CEO Elon Musk, a move that is part of a larger strategy to secure his leadership as the company pivots to an AI and robotics-focused future. The award, a “good faith” payment, comes after a US court voided his previous $56 billion pay package from 2018. Musk will pay $2 billion to purchase 96 million shares at the original 2018 price.
In a letter to shareholders, board members Robyn Denholm and Kathleen Wilson-Thompson directly addressed the issue of Musk’s divided attention, citing his numerous other ventures and political activities. They stated that the new award is a “critical first step” toward “keeping Elon’s energies focused on Tesla” and securing his long-term commitment to the company’s new mission.
Musk’s political involvement, including his support for Donald Trump, has reportedly had a negative impact on the Tesla brand and customer loyalty. A survey from S&P Global Mobility showed a dramatic and “unprecedented” drop in the percentage of Tesla owners who bought another Tesla, highlighting the challenges the company faces as a result of its CEO’s public persona.
The new shares will increase Musk’s ownership stake from 13% to about 15%, giving him more voting power. Musk has consistently argued that greater control is necessary to protect the company from activist shareholders as it shifts its strategy. The board’s letter confirms that the award is designed to gradually increase his influence, ensuring his leadership in the company’s AI-driven future. The new compensation package will be forfeited if the original 2018 deal is reinstated.