Tesla Grants Elon Musk $29 Billion in Shares to Secure His Commitment

Tesla has awarded CEO Elon Musk $29 billion worth of company shares in a strategic move aimed at retaining his leadership amid heightened competition in the artificial intelligence (AI) sector.

The grant follows a 2024 ruling by a Delaware court that invalidated Musk’s original 2018 compensation package—valued at over $50 billion—on grounds that it was unfair to shareholders. Musk is currently appealing that decision, which would make the $29 billion award a temporary replacement unless the court reinstates the original deal.

In a statement to shareholders on Monday, Tesla expressed confidence that the new share award would motivate Musk to remain committed to the company, particularly as the global race for AI talent intensifies. “It is imperative to retain and motivate our extraordinary talent, beginning with Elon,” Tesla’s board wrote on X (formerly Twitter), a platform owned by Musk.

The board praised Musk’s unique blend of “leadership experience and technical expertise,” calling him a key driver of Tesla’s transformation from an electric vehicle (EV) manufacturer to a technology company focused on AI and robotics.

The company said that should the Delaware court uphold Musk’s original 2018 pay package, the CEO would forfeit or return the current share award to prevent a “double dip” in compensation.

Tesla’s 2018 pay agreement, potentially the largest in U.S. corporate history, was designed with strict performance-based milestones—including market valuation, revenue, and profit targets. Musk achieved the goals laid out in that deal, but the court determined the board’s process for approving the package was flawed.

Musk has argued that shareholder approval—not judicial intervention—should determine executive compensation.

Commenting on Tesla’s latest move, Dan Ives, a tech analyst at Wedbush Securities, told the BBC that retaining Musk is critical. “The biggest asset for Tesla is Musk. The board needs to do this. I believe it’s a huge step forward,” he said. “During the AI arms race, they can’t afford to have him only semi-committed.”

Across the tech industry, leading companies have been aggressively recruiting AI talent with multimillion-dollar compensation offers. Meta CEO Mark Zuckerberg reportedly tried to lure developers from OpenAI with lucrative deals, while Microsoft’s AI unit—led by ex-Google DeepMind co-founder Mustafa Suleyman—has attracted key hires from Google.

Tesla said it is at a “strategic inflection point” as it seeks to evolve from an EV company to a leader in AI and robotics, underscoring the importance of Musk’s continued involvement. The share award, the board said, also acknowledges the competing demands on Musk’s time due to his leadership roles at xAI, Neuralink, and The Boring Company.

Musk recently announced a step back from politics after previously advising former U.S. President Donald Trump.