Elon Musk has been reinstated as the highest-paid CEO in history, with Tesla’s board approving a new compensation package worth nearly $30 billion.
Why it matters: The Tesla board faces unprecedented challenges in retaining and motivating Musk amidst fierce competition for AI and engineering talent.
The details:
- The new compensation package includes 96 million restricted shares, effectively a deep-in-the-money stock option grant.
- Musk has to pay $23.34 per share to own the stock, compared to its current trading value of over $300 per share, providing a significant built-in value.
- Unlike his prior pay plan, which involved specific performance targets, the new award requires Musk to remain as CEO or in a senior executive role for the next two years and hold the stock until 2030.
- The decision to move Tesla’s incorporation from Delaware to Texas has introduced a new legal landscape, requiring shareholders wishing to challenge Musk’s compensation to hold at least 3% of Tesla’s stock.
This award creates a “floor-and-ceiling” arrangement tied directly to the outcome of ongoing litigation regarding Musk’s original 2018 award.
What they’re saying:
- “Despite these legal challenges, 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,” wrote board members Robyn Denholm and Kathleen Wilson-Thompson.
- New York City Comptroller Brad Lander and Illinois State Treasurer Michael Frerichs criticized the board for what they see as an excessive and unwarranted package, especially given Tesla’s recent performance struggles.
- The SOC Investment Group, representing a substantial number of Tesla investors, raised doubts about whether the massive equity award would be sufficient to secure Musk’s full commitment and attention to reversing Tesla’s sales slump.
The other side: While many individual retail investors have supported Musk’s compensation plan, some institutional investors and pension fund leaders have expressed strong opposition.
What’s next: As Tesla continues to navigate its challenges and pivot towards AI and robotics, the debate over executive compensation and corporate governance remains a focal point for its investors.
Recent from X
A Letter to Our Shareholders on the 2025 CEO Interim Award
Dear Fellow Tesla Shareholders,
Today we announce an important first step in compensating Elon Musk for his extraordinary work at Tesla. As you know, Elon has not received meaningful compensation for eight years since…
— Tesla (@Tesla) August 4, 2025
Dan Ives wrote in a client note “Musk remains Tesla’s big asset and this comp issue has been a constant concern of shareholders once the Delaware soap opera began.” @Newsday @AP 🏆🔥🐂🎯🍿https://t.co/rRd2On4qn4
— Dan Ives (@DivesTech) August 4, 2025
Tesla Board comp package to Musk removes an overhang. This should solidify Musk as CEO for Tesla at least until 2030 in our view. Helps resolve some of the Delaware comp soap opera that has been a cloud over the name. 🏆
— Dan Ives (@DivesTech) August 4, 2025
What's happening at Tesla is a smaller version of what Trump is doing to America — fleecing it while running it into the ground. Some thoughts… https://t.co/YZrIxg2f7g pic.twitter.com/gKN7nUkrz3
— Robert Reich (@RBReich) August 4, 2025
