Tesla just handed Elon Musk a new $29 billion share-based pay package. The move comes amid the “ever-intensifying AI talent war” and Tesla hitting a crucial turning point, according to the company’s board.
This latest package taps into Tesla’s 2019 Equity Incentive Plan, already greenlit by shareholders, so no fresh vote is required. Musk’s new pay won’t kick in if Delaware’s Supreme Court overturns a January ruling that struck down his massive $56 billion 2018 package for shady negotiation processes.
Musk had warned he’d quit AI and robotics work at Tesla unless he gained more control—set against a red-hot AI war that’s fueled M&A deals and talent poaching. Meanwhile, Musk went big with his own AI startup xAI, now also owning X, formerly Twitter. 
Tesla formed a special board committee to hammer out this deal. They gave Musk 96 million shares. They’ll vest after two years if Musk stays in senior leadership and he must hold the stock for five more years after that. Unlike Musk’s last deal, this one isn’t tied to stock price or growth goals.
At Monday’s pre-market price, the shares are worth roughly $29 billion. Musk still needs to pay $23.34 per share, making his upfront value about $26.7 billion. Tesla stressed no “double dip” — Musk can’t get this and the old 2018 options if courts side with them.
Musk and his brother Kimbal recused themselves from deciding the new deal. The 2018 plan’s downfall came after shareholder lawsuits and a detailed court ruling calling that deal “deeply flawed” due to Musk’s conflicts and lack of a time commitment. Judge Kathaleen McCormick criticized the 2018 plan for letting Musk walk anytime, which Tesla fixed with the two-year tenure clause this time.
McCormick’s ruling stirred major backlash from Tesla diehards. Tesla moved its address from Delaware to Texas hoping for friendlier laws and even tried a shareholder re-vote to validate the old package—but the court wouldn’t budge.
Tesla also said it will propose a “longer-term CEO compensation strategy” at the November shareholder meeting.
“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,” the company wrote.
Tesla’s board is betting big on Musk staying put at a pivotal moment for both AI and the company’s future.
