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Tesla gives Musk $29B to keep his ‘energies focused’

Aug 4, 2025, 1:19pm EDT
business
Elon Musk, Chief Executive Officer of SpaceX and Tesla and owner of Twitter, gestures as he attends the Viva Technology conference dedicated to innovation and startups at the Porte de Versailles exhibition centre in Paris, France, June 16, 2023.
REUTERS/Gonzalo Fuentes
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Tesla is giving Elon Musk $29 billion in stock to keep his “energies focused” on the carmaker rather than his sprawling space, AI, and brain-science empire — plus his ambitions to remain a player in US politics after his high-profile split with President Donald Trump.

The last time Tesla tried to reward and incentivize Musk, a $56 billion pay package granted in 2018 tied to revenue and market-capitalization milestones was twice nixed by a Delaware court, which ruled the company had fudged its disclosures to shareholders.

The company is appealing to the Delaware Supreme Court to reinstate that package and if it’s successful, Monday’s grant would disappear. There is considerable, but quiet political pressure in Delaware for the case, which sparked Tesla and a number of tech companies to move their legal homes out of the state, to be overturned.

The grant announced Monday is a placeholder, worth about one-third of what Musk would currently be owed under the 2018 package. It has a simpler theory of the case: Don’t worry about the metrics; keeping Musk around will be good for stockholders.

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Tesla shares rose in line with the broader market.

“Retaining Elon is more important than ever,” special committee members Robyn Denholm and Kathleen Wilson-Thompson wrote in a letter to investors, which also confirmed Tesla’s new vision of being less a car company than a laboratory for Musk’s other interests. “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,” they wrote.

The package would give Musk roughly 16% voting control of Tesla as fully vested, and requires him to stay for just two years — but not necessarily as CEO. With board approval, Musk could leave the top job and take a role at the automaker focused on developing new products, while keeping the grant.



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The grant is contingent on antitrust approvals from Washington because it would increase Musk’s already significant control over the company. Such clauses are relatively rare; fewer than 10 CEOs received grants large enough to trigger an antitrust review, according to Steven Eckhaus, an executive-compensation attorney at Harris St. Laurent & Wechsler. That will force the billionaire to stay out of the crosshairs of the Trump administration, which has been wielding its antitrust authority in unpredictable and politically motivated ways.

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Antitrust approvals for CEO grants are “usually rubber-stamp situations,” Eckhaus said. “But Mr. Musk needs to stay in sync with the regulators … which will require a significant amount of disclosure.”

Concerns grew earlier this year among Tesla investors that Musk’s political activities were distracting him from the company. Though he has since left the White House, his time there appears to have damaged Tesla’s brand — first among self-described liberals who didn’t like his association with Trump, and later among conservatives after the pair’s public falling-out.

Both those problems have played out against a deteriorating backdrop for Tesla: EV subsidies being phased out, an aging product lineup, and a robotaxi launch that, while well-reviewed, faces competition from Waymo and others with a head start. Weakness in global markets — Tesla sales in Europe and China have slumped, the latter under pressure from cheaper domestic cars — have weighed on the stock.

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Notable

  • The Delaware corporate exodus sparked by the Tornetta decision isn’t slowing down much: a16z encouraged its portfolio companies to decamp less than a month ago.
  • Musk’s $30 billion grant is 15 times larger than the initial value of his 2012 package, and dwarfs the annual pay packages of the 10 top-paid CEOs.
  • Tesla — and Musk — are less valuable to Beijing than they previously were, a Wall Street Journal report found.
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