Tesla granted shares to Elon Musk worth around $29 billion, the company said on Monday, describing it as a “good faith” award to help retain the car maker’s chief after his previous multibillion-dollar pay package was struck down by a judge.
The company approved a grant of 96 million shares for Mr. Musk, which he could tap after two years of service in a “senior leadership role” at Tesla. The mercurial billionaire, whose business empire includes rockets, artificial intelligence, brain implants and more, hinted last month that he wanted more shares in Tesla, on top of his 13 percent stake, to prevent his ouster by “activist” shareholders. It was a “major concern,” he said on an earnings call with analysts.
The package amounted to an extraordinary pay raise for Mr. Musk when Tesla sales and profit are falling and the company is losing market share, in part because of his behavior. His involvement in right-wing politics has alienated many liberal car buyers who are more likely than conservatives to buy electric vehicles. Mr. Musk is already the world’s richest person, worth about $350 billion, according to Bloomberg.
The action by Tesla’s board of directors is likely to fuel criticism that the members, who include several close friends and his brother, are failing to act as a check on Mr. Musk. In a regulatory filing, the board did not impose any conditions on him except that he remain in a senior leadership role for two years. Typically, executive pay is tied to performance goals.
Tesla also appear to be taking advantage of the company’s decision last year to move its corporate domicile to Texas from Delaware, where a judge struck down his previous pay package. Tesla has appealed that decision and said Mr. Musk would not “double dip” and receive the second pay package if a higher court reinstates the original compensation plan.
In a document filed with the Securities and Exchange Commission, the board endorsed Mr. Musk’s decision to reorient the company toward autonomous “robotaxis” and humanoid robots developed with artificial intelligence. Car sales have fallen as the company focused its resources on those technologies, which do not yet generate significant revenue.
“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 toward becoming a leader in A.I., robotics and related services,” board members Robyn Denholm and Kathleen Wilson-Thompson said in a letter to shareholders Monday. They were the only members of a special committee that formulated the package.
Many shareholders buy into Mr. Musk’s strategy and will likely applaud anything that keeps him at Tesla. “This was a strategic move by the board to solidify Musk as C.E.O. of Tesla over the coming years,” Daniel Ives, an analyst at Wedbush, said in a note Monday. Mr. Ives, among Mr. Musk’s biggest boosters on Wall Street, called him Tesla’s “top asset” and said it was a “must” to keep him.
“We know that one of your top concerns is keeping Elon’s energies focused on Tesla,” the letter to shareholders said, adding that the stock award was “a critical first step toward achieving that goal.”
In addition to his businesses, Mr. Musk has plunged into politics, steering President Trump’s cost-cutting initiative before they had a falling out, after which the tech billionaire pledged to start a new political party.
Tesla’s stock lost more than half its value between December and April, but has recovered and is now down about 20 percent for the year. Tesla remains the most valuable car company by far, with a market value of nearly $1 trillion.
Mr. Musk’s previous pay package, awarded in 2018, was struck down last year by Chancellor Kathaleen St. J. McCormick of the Delaware Court of Chancery, ruling that shareholders had not been properly informed of its details and that members of Tesla’s board were not sufficiently independent. Tesla has appealed the decision, with its lawyers arguing that a second shareholder vote in favor of the package after the judge struck it down should have cleared the way for reinstating it. The shares in that package are worth roughly $85 billion at Tesla’s current stock price.
Tesla is in a profit slump, and the company has not reported an increase in quarterly earnings since the third quarter of 2024. Sales also declined this spring.
Mr. Musk explained why he thinks he is entitled to more shares when he spoke to analysts last month. “I think my control over Tesla should be enough to ensure that it goes in a good direction, but not so much control that I can’t be thrown out if I go crazy,” he said.
Jason Karaian and Peter Eavis contributed reporting.
Jack Ewing covers the auto industry for The Times, with an emphasis on electric vehicles.
The post Tesla Grants Musk $29 Billion in Stock to ‘Keep Elon’s Energies Focused’ appeared first on New York Times.
