Elon Musk is set to cash in on Tesla – but there is a catch
Tesla has dangled a particularly juicy carrot in front of Elon Musk to keep its high-profile chief executive focused on cars instead of politics, space and artificial intelligence.
The electric car giant has drafted a $US29 billion ($44.8b) deal for Elon Musk – with a catch.
Musk will only get the money if he sticks with Tesla and keeps it on the right track for the next two years.
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Tesla chief executive Elon Musk has had a big year (Photo by ANGELA WEISS / AFP)
The staggering sum represents roughly one third of what Musk originally negotiated to be paid in 2018 – a $US93 billion ($143.7b) payday that was blocked by a Delaware court which found Musk mislead Tesla shareholders by failing to declare side projects surrounding artificial intelligence.
In a letter to shareholders published overnight, Tesla chair Robyn Denholm and board member Kathleen Wilson-Thompson, said Musk deserves his enormous windfall.
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'Today we announce an important first step in compensating Elon Musk for his extraordinary work at Tesla … we can all agree that Elon has delivered the transformative and unprecedented growth that was required to earn all milestones of the 2018 CEO Performance Award. This growth has translated into immense value generated for Tesla and all our shareholders'.
The brand has had a bumpy year in 2025.
High points include the successful debut of its updated Model Y 'Juniper', the initial rollout of Tesla Robotaxi service in Austin, and the launch of a new diner in California.
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A Tesla Cybertruck drives outside the newly opened Tesla Diner on July 31, 2025 in Hollywood, California. Photo: MARIO TAMA / GETTY IMAGES NORTH AMERICA
But it also endured widespread protests linked to Elon Musk's political involvement in the US and close ties to President Trump.
Musk started the year with regular appearances in White House as part of the 'Department of Government Efficiency', but spectacularly severed ties with Trump months later, trading blows on social media.
The company's share price almost halved between January and April.
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Musk worked closely with President Donald Trump in early 2025. Picture: AP Photo/Evan Vucci
And it faces fierce challenges from several fronts, including emerging brands from China, such as BYD, and established giants such as Ford and General Motors that are fighting for their future.
In Australia, data released this week shows Tesla's sales for the year to date have fallen by more than 40 per cent.
Tesla says Musk might get his full compensation package if legal challenges are successful.
The company will discuss the subject with shareholders in November.
This week's letter published on behalf of board members made a determined case for Elon to remain at Tesla as chief executive.
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'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,' it said.
'To succeed, it requires a leader who combines strategic foresight, adaptability, and relentless execution to outperform competition and inspire the team. Elon has demonstrated these unmatched leadership abilities time and time again with his unparalleled track record of delivering shareholder value since he joined as a founding figure and spearheaded the transformation of our extraordinary company.
The new Tesla Model Y is an impressive car. Picture: Mark Bean
'And while these impending changes are exciting, the outcomes are not guaranteed. It is imperative to retain and motivate our extraordinary talent, beginning with Elon.
'The war for AI talent is intensifying, with recent months including multibillion-dollar acquisitions of companies and nine figure cash compensation packages for non-founder, individual AI engineers. 'Even among this group of highly talented individuals, 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.
Tesla has big plans for its Robotaxi service. Picture: Supplied
'While we recognise that Elon's business ventures, interests and other potential demands on his time and attention are extensive and wide-ranging, including his leadership roles at xAI, SpaceX, Neuralink, X Corp., and The Boring Company as well as his other interests, we are confident that this award will incentivise Elon to remain at Tesla and focus his unmatched leadership abilities on further creating shareholder value for Tesla shareholders and attracting and retaining talent at Tesla.
'To be clear, losing Elon would not only mean the loss of his talents but also the loss of a leader who is a magnet for hiring and retaining talent at Tesla.'
Originally published as Elon Musk is set to cash in on Tesla – but there is a catch
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