Tesla just proposed a new $29 billion stock package for CEO Elon Musk. The board said the payout is to tackle the “ever-intensifying AI talent war” and Tesla’s critical moment.
The deal gives Musk 96 million shares, vesting in two years if he stays in a senior role and holds the shares for five years. This time, no stock price goals are attached.
The catch: This plan must clear a shareholder vote in November. Plus, it could vanish if Delaware’s Supreme Court overturns a January ruling that struck down Musk’s 2018 pay deal for being poorly negotiated behind the scenes. 
Musk has threatened to cut Tesla AI and robotics work unless he gets more company control. Meanwhile, he’s building his own AI firm, xAI, which owns X, the social media platform formerly known as Twitter.
Tesla formed a special committee led by chairwoman Robyn Denholm and board member Kathleen Wilson-Thompson to craft this new package. Musk and his brother Kimbal (also a board member) recused themselves from the process.
The 2018 package, worth $56 billion, was killed after a judge found Musk’s deep role in shaping it and the board’s cozy ties “deeply flawed.” That deal also lacked time-based commitments from Musk, unlike this new two-year service pledge.
Delaware’s Chancellor Kathaleen McCormick called Tesla’s shareholder vote to approve the 2018 deal “unprecedented” and rejected it in December 2024, sparking Tesla’s move to reincorporate in Texas with looser shareholder rules.
Tesla warned Musk can’t “double dip” by keeping this new award and the 2018 options if the court sides with the company.
Tesla wrote:
“Elon will not be able to keep this new award in addition to the options he will be awarded under the 2018 CEO Performance Award should the courts rule in our favor.”
