Tesla Approves $29 Billion Stock Award for CEO Elon Musk, Shares Climb 2.4% Pre-Market

TradingKey - On Monday, filings with the U.S. Securities and Exchange Commission revealed that Tesla has approved the granting of 96 million shares to Elon Musk, valued at approximately $29 billion based on last Friday’s closing price of $302.63 per share. Tesla shares rose 2.4% in pre-market trading.

Under the award terms, these shares will vest on August 3, 2027, with Musk required to pay $23.34 per share, the same strike price as his 2018 compensation plan. The condition for receiving this reward is Musk’s continued role as an executive at Tesla.

In 2024, a court ruled that Musk's over $50 billion pay package from 2018 was invalid, a decision currently being appealed to the Delaware Supreme Court. 

According to media reports, after the plan was rejected, Musk repeatedly threatened to leave Tesla unless granted more stock and greater control of the company. He reiterated these demands last month amid Tesla’s poor performance.

The board characterized this reward as a "good faith" payment to Musk, meant to ensure his continued leadership at Tesla and to enhance his voting power, thereby keeping him focused on Tesla’s mission. 

The plan’s approval underscores Musk’s strong influence over Tesla and assures his short-term commitment to the company. In a May interview with Bloomberg, Musk stated his intent to lead Tesla for at least the next five years.

This move comes at a pivotal moment for Tesla. The company’s stock has dropped about 25% this year, grappling with aging models, intense competition, and a brand image impacted by Musk’s political involvement, all contributing to a decline in overall sales. During these challenging times for its automotive business, Musk is positioning Tesla as an AI and robotics company. Investors are keenly watching developments in its robotaxi and humanoid robot sectors.

Furthermore, as reported by MarketWatch, with this compensation plan, Musk’s Tesla shareholdings will total 506,794,076 shares, valued at $153.37 billion. According to the Bloomberg Billionaires Index, Musk, as the richest person, is significantly ahead, and this plan could further widen his wealth gap with other billionaires.