Tesla has taken a big step to secure the future of its iconic founder.
In a move that may be seen as symbolic as it is strategic, the company’s board of directors has approved a $29 billion interim compensation package for CEO Elon Musk. The incentive to Musk may be a sign that Tesla isn’t backing down from its commitment to the controversial mogul, even as lawsuits continue to block a previously scheduled pay award.
The new package will grant Musk 96 million restricted stock units of Tesla for $23.34 per share, contingent on a two-year vesting period and antitrust approval, according to a statement posted to X on August 4.
Tesla’s supportive statement comes after Delaware courts invalidated Musk’s 2018 CEO performance award despite shareholder approval not once, but twice. Tesla’s legal battle to reinstate that award, which would have financially benefited Musk, remains unresolved.
Now, the automotive giant has made it clear: it’s tired of waiting.
“After all, a deal is a deal,” Tesla wrote in their open letter to shareholders published on Monday.
The company emphasized that Musk has gone eight years without “meaningful” compensation, and yet delivered “transformative and unprecedented growth” that increased Tesla’s market cap by over $700 billion.
Regardless of the lack of claimed “meaningful” compensation for Musk from Tesla, the entrepreneur’s new worth is listed as over $400 billion as of August 2025, per Forbes.
Tesla’s board of directors argues that this new financial award isn’t just about fairness: it’s about keeping Musk on the team.
Musk, who is also deeply involved in his other ventures like SpaceX, Neuralink, and X, has a demanding daily schedule. Tesla’s leadership believes keeping him focused on Tesla is vital.
“Through Elon’s unique vision and leadership, Tesla is transitioning from its role as a leader in the electric vehicle and renewable energy industries to grow towards becoming a leader in AI, robotics and related services. To succeed, it requires a leader who combines strategic foresight,” wrote Robyn Denholm and Kathleen Wilson-Thompson of the board’s special committee.
“No one matches Elon’s remarkable combination of leadership experience, technical expertise, and, arguably most importantly, decades-long proven track record of building the most revolutionary and profitable businesses across different industries,” the board added.
Stockholders could, however, point to Tesla’s declining vehicle sales and stock price, down 25% overall this year according to Reuters, as signs Musk may be stretched too thin, particularly after injecting himself into politics and facing backlash from left-winged agitators.
Still, the board’s message is clear: politics aside, Musk is the reason Tesla exists, and the best chance it has for the next successful chapter in the company’s unfolding storyline.
Additionally, the automotive company also pledged transparency and committed to putting a longer-term CEO compensation strategy to a shareholder vote at its upcoming annual meeting in November.
For many Tesla shareholders, this decision may not be about whether Elon Musk is controversial, but whether he’s irreplaceable.