Tesla Board Restores CEO Elon Musk to Become the Highest Salary in History $29 billion Payment package. His new contract with the $970 billion electric car manufacturer comes after a Delaware judge Two abolished Musk’s former Moonlight Giant. Musk’s salary has been in lawsuits for the past seven years.
Tesla Board Chairman Robyn Denholm and Director Kathleen Wilson-Thompson in a copy Letter to shareholders. “The war on AI talent is intensifying, including billion-dollar acquisitions of companies and a nine-digit digital cash compensation package for non-basic AI engineers.”
Even in that selected group, there was no match for Musk, the board members wrote. As a result, the nearly $30 billion award is crucial to focusing Musk on Tesla and let him recruit new talents to keep EV manufacturers competitive in terms of AI, robots and robots. Unlike Musk’s previous compensation plan, which includes Huge shareholder value barriers He has to overcome that all Musk has to do to collect new awards is Stay at Tesla Hold CEO or senior executive roles for the next two years. Under the terms of the award, he must also hold the stock until 2030, which will increase his ownership stake from about 13% to 15%.
Brian Dunn, a 40-year salary practitioner, director Compensation Research Institute Cornell University tells wealth Musk’s new award is similar to what some experts call “fog grants.”
“If you’re around and leave enough breath to mist the mirror, you’ll get them,” Dunn said. “These have no performance goals.”
Technically, the award will be awarded with a restricted share, but Musk has to pay $23.34 per share to own the stock, the same as his 2018 option. Tesla’s stock trades for more than $300 per share, the arrangement gives Musk a built-in value of about $280, something some Comp experts call “discount options.”
Larry Cunningham University of DelawareThe Weinberg Center for Corporate Governance says that no matter how the ruling is classified for accounting or tax purposes, there is a simple and accurate description.
Cunningham tells wealth In the statement.
Musk’s salary package has a $26 billion floor
The new package created what Eric Hoffmann described as the “floor and ceiling” arrangement, described by the largest consultant, directly related to the outcome of Tesla’s ongoing lawsuit in Delaware. If the court again takes away his original 2018 303 million stock options prize, Musk will retain the new 96 million shares at the current stock price, worth about $2.9 billion. However, if any portion of the original grant is restored, the new award will be reduced accordingly.
“There is a clause that says ‘no double immersion’,” he said. “But if he fails in the course of legal action, the 96 million prize can be used to make up for any original grant.”
Hoffman said Tesla’s board of directors “stepped into unprecedented territory” when it comes to executive compensation.
“There is no script,” Hoffman said, analyzing the terms of the award. “They received the first grant, they were overturned by the judge, they received another grant, approved by shareholders, and then detained.”
Attaining levels, shareholder challenges to Musk’s 2018 compensation package led to landmark opinions, where Musk’s salary was revoked. Tesla’s board of directors then sent the salary plan back to shareholders in 2024 to obtain approval for a paid vote, which voted in favor of awarding Musk to Comp. Last December, the same judge – Kathaleen McCormick, president of the Delavare CourtRefusing to reverse Tesla has since appealed her previous decision.
The board wrote in a letter to investors when the court will rule again, describing the award as “the first step, ‘sincere’ to pay Elon.”
However, Tesla’s performance in 2025 is far from the cry of 2018, when the board first awarded Musk his bold moon grant. He followed the award, increasing Tesla’s value by 12 times. Its market capitalization once again exceeded $1 trillion in October 2021 and May 2025. But Tesla has been struggling lately. Its stock price has fallen more than 18% year-to-date, and Musk has been active politically, supporting President Donald Trump despite its affiliation Especially in California.
This time, the board of directors has little chance. Tesla established a major legal barrier in May, which made the award’s challenge even more difficult.
Tesla shareholders after McCormick’s ruling Approved an action From being founded in Delaware to Texas. In May, Texas revised its commercial regulations and Tesla revised its bylaws a day later. this Articles of Association Amendment A new threshold has been created, so any shareholder who wants to challenge Musk’s salary in court must hold at least 3% of Tesla’s shares. The value is worth more than $3 billion.
“The central theme here is that Tesla has moved its merger jurisdiction from Delaware to Texas, so the appropriateness of Tesla’s actions and Musk’s compensation must be judged under Texas law, which is more permissible.” John Coffee In a statement wealth. “Tesla may be sued, but there are more favorable odds in Texas.”
Texas follows Tesla’s move to make it business-first state through a campaign. At this point, it is unclear how the Texas courts respond to the challenge.
“It would be interesting to see if Texas courts choose to follow Delaware’s analytical framework or refuse to engage in a similar judicial review,” Cunningham said. “The results could impact how other companies weigh the relative merits of Delaware versus Texas as a corporate home.”
Investors react to Musk’s supplement
Tesla has veritable individual retail investors, many support Musk and vote for his Comp Plan Now twicesurpassing it with most support.
But some pension fund leaders that oversee retirement assets invested in Tesla stocks are not excited about Musk’s new award.
“Any CEO’s $29 billion compensation package, not to mention, is largely the person who is responsible for their day-to-day responsibility,” New York City Auditor General Brad Lander said in a statement.
Rand said Tesla’s board of directors is “againing” Musk with investor fees.
Illinois Treasurer Michael Frerichs told wealth A $29 billion payment is “shocking on the surface.”
“But given Elon Musk’s inconsideration with Tesla’s daily demands, the company’s stock value is even worse, and the plan shows that the board’s responsibility for investors is placed at a step,” Frerichs wrote in a statement. “Due to insufficient revenue, the board should not care about paying loyalty to a greedy CEO rather than a long-term plan for the success of the company. Shareholders should demand better corporate governance.”
SOC Investment Group represents a group of investors and invested nearly 8 million shares in Tesla wealth In a statement, today’s announcement included a surprising admission from the board. “Even an additional 24B equity may not inspire Elon Musk to live for another two years, let alone make sure he spends enough time and attention to reverse the current sales,” Soc wrote.
