Tesla’s board has approved a new share award worth $29 billion (£22 billion) for chief executive Elon Musk, just months after a Delaware judge voided his previous $56 billion pay package.
The decision, announced in a financial filing on Friday, aims to reaffirm a compensation plan first agreed in 2018, which remains tied up in legal appeals.
Musk will pay $2 billion to acquire 96 million Tesla shares at the same price per share set in the original deal.
The award was recommended by a special committee of Tesla’s board and comes as the company seeks to maintain Musk’s focus amid growing scrutiny over his outside ventures and political involvement.
A letter from two committee members, Tesla chair Robyn Denholm and board member Kathleen Wilson-Thompson, accompanied the filing. They described the new award as a “good faith” action following the court’s rescission of the previous package earlier this year.
“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 board members said the decision followed a review of investor feedback, including letters and posts on X, the social media platform owned by Musk.
“From those communications, we know that one of your top concerns is keeping Elon’s energies focused on Tesla,” the letter stated. “This award is a critical first step toward achieving that goal.”
The renewed pay package comes as Musk’s role at Tesla is increasingly questioned. In addition to serving as CEO, Musk oversees SpaceX, Neuralink, AI firm xAI, and X, formerly Twitter.
His growing presence in US conservative politics, particularly his public backing of Donald Trump, has stirred controversy, prompting backlash from some Tesla customers and shareholders.
Dan Ives, a tech analyst at Wedbush Securities, said the stock award could help stabilise investor sentiment and lift Tesla’s share price. “Musk remains Tesla’s big asset,” Ives said.
The $29 billion valuation is based on Tesla’s closing share price on Friday. Musk, the world’s richest person, is currently worth $350 billion, according to Bloomberg’s Billionaires Index.
Tesla has also seen a dip in customer loyalty. A recent survey by S&P Global Mobility, shared with Reuters, found that just 49.9% of Tesla households repurchased a Tesla in March 2025, down from 73% in June 2024.
While the figure rebounded slightly to 57.4% in May, analysts say the decline has been steep and unprecedented.
“I’ve never seen this rapid a decline in such a short period of time,” said Tom Libby, an analyst at S&P.
Musk’s new shares will raise his stake in Tesla from 13% to about 15%. He has said he seeks greater control to guard against “activist shareholders” who could attempt to remove him.
Tesla is also shifting its business strategy, investing heavily in robotaxi development and humanoid robotics, signaling a move beyond car manufacturing toward a broader AI and robotics focus.
“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,” Denholm and Wilson-Thompson wrote.
The new package is structured to increase Musk’s voting power gradually. However, if the Delaware court ultimately reinstates the full 2018 compensation plan on appeal, the newly approved award will be voided.
Tesla shares, which are down nearly 20% year-to-date, rose more than 3% in early trading following the announcement.
