While its original $56 billion pay package for Elon Musk remains tied up in court, Tesla has moved to grant its CEO an interim award of nearly $29 billion. It is the latest in a protracted battle over how to compensate one of the world’s most visible and polarising executives.
In a filing with the U.S. Securities and Exchange Commission, Tesla announced a new “2025 CEO Interim Award” that grants Musk the right to purchase 96 million shares at $23.34 per share, the same price from a voided 2018 deal. The new arrangement, already approved by shareholders, requires Musk to remain in a senior leadership role at Tesla for two years and hold the shares for five.
This interim award is a direct response to a Delaware court’s decision last year, which invalidated Musk’s original $55.8 billion compensation plan. The court found that Tesla’s board failed in its duty to shareholders, effectively rubber-stamping a deal proposed by Musk without proper negotiation or evaluation of his actual value to the company.
In a statement posted on X, directors Robyn Denholm and Kathleen Wilson-Thompson described the new package as a measure to “honour the bargain that was struck with Musk in 2018.”
They framed the nearly $29 billion award as a first step. “We have recommended this award as a first step, ‘good faith’ payment to Elon,” they wrote.
Tesla is simultaneously appealing the court’s decision to the Delaware Supreme Court. If that appeal succeeds, Musk would either return the interim award or forfeit a portion of the original package to prevent a “double dip.”
The central question is what it takes to keep Elon Musk focused on Tesla. The board argues that extraordinary compensation is essential.
“It is imperative to retain and motivate our extraordinary talent, beginning with Elon,” wrote Denholm and Wilson-Thompson. “While we recognise that Elon’s business ventures, interests and other potential demands on his time and attention are extensive and wide-ranging… we are confident that this award will incentivise Elon to remain at Tesla.”
However, the court that struck down the 2018 deal pointed to the board’s reverence for Musk as a core problem, suggesting it was unclear if they were acting in the best interest of the company or its celebrity CEO. The court noted that the board’s praise for Musk’s “unmatched leadership” was part of what made the original deal suspect.
Musk himself has a different explanation for why the compensation matters. It isn’t about the money, he claims, but about control.
“I am uncomfortable growing Tesla to be a leader in AI & robotics without having 25% voting control,” Musk wrote in January. “Enough to be influential, but not so much that I can’t be overturned. Unless that is the case, I would prefer to build products outside of Tesla.”
Currently, Musk holds a 13 percent stake in the company. This new award would significantly increase his holdings and influence, moving him closer to his stated goal. Meanwhile, Tesla has said it is developing a “longer-term CEO compensation strategy,” which shareholders are expected to vote on this November. The outcome will signal how much control they are willing to cede to secure the attention of their singular leader.