Why Tesla just gave Elon Musk a $23.7 billion stock award—and what it means for the company’s future

Why Tesla just gave Elon Musk a $23.7 billion stock award

Tesla has awarded CEO Elon Musk a massive stock grant worth $23.7 billion as a retention incentive, amid concerns about his divided attention and the company’s sluggish performance. The award—96 million shares—will vest over two years if Musk stays in charge. Tesla described this as a “first step” to keeping him focused. It comes after courts invalidated his earlier $50 billion compensation plan in 2024, the Wall Street Journal reported.

Why Tesla thinks it needs Musk right now

Tesla’s board made the move at a time when the EV giant is struggling with falling sales, growing competition, and concerns about Musk’s priorities. While he has launched Tesla’s robotaxi initiative, he is also pouring energy into xAI and SpaceX. The board argued in a filing that Musk is essential not just for innovation but for attracting top talent—and that losing him could be damaging.

Tied to control, not just money

Musk has said he doesn’t need the money, but wants control. At the Qatar Economic Forum in May, he insisted he couldn’t lead Tesla’s future—including its AI and robotics bets—without stronger voting power. He’s wary of being ousted by activist shareholders. Tesla’s new stock grant could help address this concern, though it’s conditional on Musk not winning back the 2018 package in court.

Legal questions and shareholder risks

The new package could become void if the Delaware Supreme Court restores Musk’s earlier $50 billion deal, which was struck down in 2024 after a shareholder lawsuit. That deal had been reapproved by shareholders but was ruled flawed by the Chancery Court due to Musk’s close ties to Tesla’s board. Tesla now plans to put a long-term pay plan to a shareholder vote in November.

How much will Musk actually receive?

If the shares vest, Musk would receive stock valued at $29.1 billion at current prices, but must pay $2.2 billion to exercise the award. Tesla has reduced the value on paper to $23.7 billion to account for restrictions like the two-year lock-in. The company says it won’t record a compensation expense unless it believes Musk will actually receive the stock—an evaluation that will happen quarterly.

What’s next for Tesla’s leadership and compensation plan

This interim award might be just the beginning. Tesla board members Robyn Denholm and Kathleen Wilson-Thompson said they are still working on a longer-term CEO pay package, expected to be voted on at Tesla’s November annual meeting. The company wants to avoid repeating the legal mess of the 2018 deal—but still retain Musk, who they say was responsible for a $735 billion market-cap jump after his last incentive plan.