Tesla said Monday it is granting CEO Elon Musk about $29 billion worth of shares as an interim payment, while his existing pay package remains tied up in court.
In a letter to shareholders, Tesla Chair Robyn Denholm and board member Kathleen Wilson-Thompson said the electric vehicle (EV) maker is offering 96 million shares to Musk as a “good faith” payment.
“[We] are confident that this award will incentivize Elon to remain at Tesla and focus his unmatched leadership abilities on further creating shareholder value for Tesla shareholders and attracting and retaining talent at Tesla,” they wrote in the letter shared in a securities filing.
“To be clear, losing Elon would not only mean the loss of his talents but also the loss of a leader who is a magnet for hiring and retaining talent at Tesla,” Denholm and Wilson-Thompson continued.
Musk’s 2018 pay package has remained tied up in court for the past several years. Delaware Chancery Judge Kathaleen McCormick struck down the package, initially worth $56 billion, last January, finding it wasn’t negotiated fairly.
She blocked it once again in December, following a Tesla shareholder vote reaffirming the agreement.
Denholm and Wilson-Thompson underscored Monday that there cannot be any “double dip” on the pay package if it is eventually upheld in court, meaning Musk would have to forfeit part of the original payout.
“[We] know that one of your top concerns is keeping Elon’s energies focused on Tesla,” they added in the letter to shareholders. “This award is a critical first step toward achieving that goal, although it is limited by the capacity of our current equity incentive plan.”
Tesla has faced a tumultuous year so far amid Musk’s political moves. After supporting President Trump’s 2024 campaign, he secured a spot in the administration, boosting Tesla’s share price amid expectations that the tech mogul’s companies would benefit.
However, Musk’s controversial role leading the Department of Government Efficiency’s cost-cutting efforts weighed heavily on the EV maker, as it became a proxy for its CEO’s government work.
As Tesla continued to suffer, he eventually announced his plans to depart the Trump administration.
However, shortly after, he became involved in a public feud with Trump over his spending plan, worrying investors as the president threatened to target Musk’s government subsidies and contracts.
Musk said in late July that Tesla could face a “rough” couple of quarters, after the company posted a 16 percent dip in earnings. However, he appeared optimistic about the firm’s prospects next year, as it increasingly focuses on artificial intelligence and robotics.
