Tesla’s board has approved the award of $30 billion (₹2.6 lakh-crore approximately) worth of shares to its chief executive, Elon Musk, after a US court overturned a previous pay deal for the world’s richest individual.
Musk will pay $2 billion (₹17. 5 crore approximately ) to purchase 96 million shares in the electric vehicle maker at the same price as the 10-year pay package agreed in 2018, which remains in legal limbo pending an appeal. The award is based on the recommendation of a “special committee” of the board.
The announcement, made in a regulatory filing, was accompanied by a shareholder letter from Tesla chair Robyn Denholm and board member Kathleen Wilson-Thompson.
They described the award as a “good faith” payment to Musk, following the rescinding of his earlier $56 billion compensation package by a judge in 2024.
“To recognise what Elon has accomplished and the extraordinary value he delivered to Tesla and our shareholders, we believe we must take action to honour the bargain that was struck in 2018,” the directors wrote. “After all, ‘a deal is a deal’.”
The letter also acknowledged concerns among shareholders about Musk’s public political engagements, particularly his recent alignment with Republican politics, which some believe has tarnished Tesla’s brand and dented sales. Denholm and Wilson-Thompson said they had reviewed investor feedback and social media commentary on X – the platform owned by Musk – and noted worries about his focus on the company.
“From those communications, we know that one of your top concerns is keeping Elon’s energies focused on Tesla,” they said. “This award is a critical first step toward achieving that goal.”
The latest award is valued at approximately $30 billion (₹2.6 lakh-crore), based on a pre-market share price of $308. Musk’s net worth currently stands at $350 billion (over ₹30 lakh-crore), according to the Bloomberg Billionaires Index.
Over the past year, Musk has become increasingly entangled in US politics and his ties with Donald Trump – who returned to the White House with financial and personal support from Musk – have become a source of political and reputational risk for Tesla. The association has alienated left-leaning consumers in the US and abroad, though growing competition in the electric vehicle market has also played a role in flagging sales.
A survey by S&P Global Mobility found Tesla’s customer loyalty has declined sharply since Musk’s endorsement of Trump. In March this year, 49.9 percent of Tesla-owning households buying a new car chose another Tesla – slightly below the industry average and down from 73 percent in June 2024. The figure rebounded slightly to 57.4 percent in May.
S&P analyst Tom Libby described the drop as “unprecedented,” noting: “I’ve never seen this rapid of a decline in such a short period of time.”
Musk remains Tesla’s largest shareholder, with a 13 percent stake. The company is increasingly positioning itself as an artificial intelligence and robotics firm, with plans to pivot towards robotaxis and humanoid robots.
“While we recognise 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,” the directors wrote.
They added that the structure of the award is designed to gradually increase Musk’s voting power – something both he and investors have repeatedly said is critical to ensuring his continued focus on Tesla’s long-term mission.
Tesla shares, which are down nearly 20 percent so far this year, rose more than 2 percent in pre-market trading.