Tesla issues $29B stock grant to Musk after court blocked pay
The grant, disclosed in a regulatory filing this week, gives Musk 96 million restricted shares in what Tesla described as a "first step, good faith" move to keep him focused on the company amid his growing commitments to ventures like SpaceX and xAI.
"Rewarding Elon for what he has done and continues to do for Tesla is the right thing to do," the company said, citing a $735 billion increase in Tesla's market value since 2018.
Tesla noted that Musk has not received pay in years, after a Delaware court twice struck down his 2018 compensation plan, most recently in December 2023, when the court ruled the plan had been devised through "sham negotiations" with board members who lacked independence. Tesla has appealed that decision and formed a special committee in April to reevaluate Musk's compensation.
To unlock the new grant, Musk must pay $23.34 per share—the exercise price under the original 2018 plan.
The latest award comes as Tesla tries to calm concerns among shareholders following a 25 percent slide in its stock price this year. The drop has been fueled in part by backlash to Musk's alignment with President Donald Trump and his increasing political activity, including time spent in Washington pushing for deep federal government cuts.
At the same time, Tesla faces growing competition from U.S. automakers and aggressive rivals in China. In the most recent quarter, the company's profits tumbled from $1.39 billion to $409 million, falling short of analysts' already-lowered expectations.
Still, Tesla insists Musk is central to its long-term success. The company pointed to his leadership as a key reason for continued investor confidence, even as his distractions outside of Tesla have tested that confidence.
"Musk remains Tesla's big asset and this comp issue has been a constant concern of shareholders once the Delaware soap opera began," wrote Wedbush analyst Dan Ives in a client note. "We believe this grant will now keep Musk as CEO of Tesla at least until 2030 and remove an overhang on the stock."
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