Tesla has recently granted CEO Elon Musk an interim compensation package valued at approximately $29 billion, in light of the ongoing legal dispute surrounding his original 2018 CEO Performance Award.
In a letter addressed to shareholders, Tesla’s Board announced the unanimous approval (with Elon and Kimbal Musk abstaining) of issuing 96 million restricted shares to Musk, which represents about one-third of the total 300 million shares associated with the 2018 award. The original award, currently valued at over $50 billion, had garnered support from more than 72% of Tesla shareholders in both 2018 and 2024, but has faced legal challenges in Delaware courts.
Despite the legal hurdles, Tesla remains steadfast in its efforts to reinstate the 2018 CEO Performance Award, acknowledging Musk’s pivotal role in driving transformative growth for the company. Earlier this year, Musk formally appealed a Delaware court ruling that invalidated the $56 billion compensation plan.
Under the terms of the 2025 CEO Interim Award, Musk is set to receive the shares at the original $23.34 per-share exercise price established in the 2018 plan. The award includes a two-year vesting period, during which Musk must maintain a senior leadership position at Tesla, as well as a five-year holding period with exceptions for tax obligations or acquisition costs.
If the Delaware Supreme Court ultimately reinstates the 2018 agreement, the interim award will be forfeited to prevent any duplicative compensation, instead serving as an advance towards the original 300 million shares promised to Musk.
Tesla views this interim award as a strategic move to secure Musk’s leadership during the company’s transition from electric vehicles and energy to artificial intelligence and robotics. Following the vesting of the shares, Musk’s ownership stake in Tesla will rise from 12.9% to approximately 14.6%, inching closer to his target of 25% ownership for increased voting control.
Furthermore, Tesla intends to present a long-term CEO compensation strategy for shareholder approval at its upcoming annual meeting on November 6th.