Tesla has awarded its CEO, Elon Musk, a massive stock grant worth $29 billion, recognizing his significant contributions to the company’s growth over the years. Despite facing challenges linked to his recent political involvement, which has impacted sales and stock performance, Tesla is hopeful that this move will keep Musk focused and committed to leading the company.
Musk received 96 million restricted shares, as Tesla noted in its announcement that he has not received a paycheck for years due to a court ruling that invalidated a previous compensation package. This recent grant comes amidst a legal battle regarding his 2018 pay agreement, which has been revoked multiple times but is currently under appeal.
In the regulatory filing, Tesla emphasized the importance of Musk’s leadership across multiple ventures, including SpaceX and xAI. Musk has indicated a need for increased shares to ensure he remains in control and cannot be easily removed by activist shareholders. The company pointed to the impressive $735 billion increase in Tesla’s market value since 2018 as justification for the reward.
However, Tesla’s stock has faced a 25% decline this year, predominantly due to backlash over Musk’s association with former President Trump, along with escalating competition from traditional automakers and firms in China. In a recent quarter, the company’s profits dipped sharply from $1.39 billion to just $409 million, with revenue also falling short of Wall Street’s expectations.
Investor sentiment has grown cautious, particularly as Musk has been increasingly present in Washington, becoming a significant player in Trump’s vision for reducing the size of the U.S. government. Tesla’s regulatory filing specified that Musk must first pay $23.34 per share for the stock that vests, aligning with the exercise price of the earlier pay package.
The ongoing legal disputes surrounding Musk’s compensation stemmed from a lawsuit challenging the legitimacy of his 2018 package, dubbed “sham negotiations” by a Delaware court. In light of the recent turbulence, Tesla is set to hold its annual shareholders meeting in November, ensuring transparency and communication as shareholders express concerns over the company’s direction.
The announcement of Musk’s stock grant has led to a slight recovery in Tesla’s stock, which rose nearly 2% in midday trading. With analyst Dan Ives suggesting that this grant will stabilize Musk’s position as CEO until at least 2030, it’s clear that the focus remains on Musk as a key asset to Tesla’s future.
