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Tesla board awards Elon Musk $30bn worth of shares

Chief executive will pay $2bn to buy 96m shares at same price as 2018 pay package rescinded by US court

Elon Musk wears a Maga hat before his political relationship with Donald Trump turned toxic. Photograph: Kevin Lamarque/Reuters

Elon Musk wears a Maga hat before his political relationship with Donald Trump turned toxic. Photograph: Kevin Lamarque/Reuters

Tesla’s board has approved awarding $30bn (£23bn) worth of shares to its chief executive, Elon Musk, after a US court ruled against a previous pay deal for the world’s richest person.

Musk will pay $2bn to buy 96m shares in the electric carmaker at the same price as the 10-year pay package agreed in 2018, which is stuck in legal limbo awaiting a court date for an appeal. The award was based on a recommendation from a “special committee” of the board.

The announcement in a financial filing was accompanied by a shareholder letter from two members of the committee, the Tesla chair, Robyn Denholm, and Kathleen Wilson-Thompson.

It described the award as a “good faith” payment to Musk after the previous pay deal worth $56bn was rescinded in 2024 by a judge in Delaware, where the company was incorporated until June that year.

“To recognise what Elon has accomplished and the extraordinary value he delivered to Tesla and our shareholders, we believe we must take action to honour the bargain that was struck in 2018. After all, ‘a deal is a deal,’” wrote the directors.

They also alluded to Musk’s foray into Republican politics, which has damaged the Tesla brand and sales – as well as raising concerns among shareholders. Denholm and Wilson-Thompson said they had reviewed investors’ letters and posts on X – the social media network owned by Musk – and acknowledged worries about his focus on his job.

“From those communications, we know that one of your top concerns is keeping Elon’s energies focused on Tesla. This award is a critical first step toward achieving that goal,” they wrote.

The award is worth about $30bn based on a share price of $308 in pre-market trading. Musk is worth $350bn, according to the Bloomberg billionaires index.

Over the past year, Musk has become embroiled in US politics and a political relationship with Donald Trump that turned toxic once the president entered the White House for the second time, a feat assisted by the Tesla chief executive’s financial and personal support. The furore put off left-leaning Tesla buyers inside and outside the US, although stiff competition in the electric car market has also affected sales.

A survey from the research firm S&P Global Mobility shared with Reuters showed Tesla’s customer loyalty plunged since Musk endorsed Trump. It found 49.9% of Tesla-owning households in the market for a new car bought another Tesla last March. This was just below the industry average, but was down from 73% in June 2024. It edged back up to 57.4% in May this year.

Tom Libby, a S&P analyst, said the fall was “unprecedented”, adding: “I’ve never seen this rapid of a decline in such a short period of time.”

Musk is Tesla’s largest shareholder with a 13% stake. The company is shifting its focus to robotaxis and humanoid robots, in a move that positions Tesla more as an artificial intelligence and robotics firm than an automaker.

“While we recognise Elon’s business ventures, interests and other potential demands on his time and attention are extensive and wide-ranging ... we are confident that this award will incentivise Elon to remain at Tesla,” wrote the directors.

The award is designed to gradually increase Musk’s voting power, something he and shareholders had consistently said was key to keeping him focused on Tesla‘s mission, the directors added.

Tesla shares, which have fallen nearly 20% so far this year, rose more than 2% in premarket trading.

Author: Dan Milmo Global technology editor

Source: The Guardian

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