Tesla has awarded Elon Musk a new batch of company shares worth $29 billion in what it calls a “good faith” move to retain the billionaire as it pivots away from electric cars toward autonomous tech and robotics.
This grant, amounting to 96 million shares, is Tesla’s answer to the void left by a Delaware court’s cancellation of Musk’s original $56 billion compensation deal. The court had ruled that the earlier package was tainted by conflicts of interest and lacked proper oversight.
Tesla is not waiting for the final outcome of Musk’s appeal. Instead, it’s trying to secure his loyalty during a period of waning sales, political fallout, and rising competition.
Tesla is shedding its identity as an electric carmaker as Musk is doubling down on robotaxis, full autonomy, and humanoid robots like the Optimus project. The company has already started a limited robotaxi pilot in Austin, Texas, using retrofitted Model Ys, but it’s yet to gain regulatory clearance for wider deployments, especially in California, where Tesla is now quietly testing ride-hailing services without confirming if they involve autonomous tech.
Meanwhile, the company’s ageing vehicle lineup, falling demand, and Musk’s increasingly controversial public stances have left investors uneasy. Tesla shares are down roughly 25% this year.
In China, shipments from its Shanghai plant slipped 8.4% year-on-year in July, under pressure from rivals like BYD and Xiaomi. In the U.S., electric vehicle subsidies are being slashed, cutting into buyer incentives.
Still, some investors see the new share award as a stabilising force. Gary Black, a former Tesla investor, said on X: “This should be viewed very favorably by Tesla shareholders. It aligns Elon’s incentives with long-term value creation and clears up uncertainty.”
Others are unconvinced. Corporate governance expert Charles Elson called the move “simply a repackaged version of what was done years ago and was ruled improper by a judge.” He added, “It renders the Delaware court decision effectively meaningless.”
The shares will only vest if Musk remains in a top executive role through 2027. They come with a five-year lock-up, barring sales except for tax payments or the cost to exercise them, set at $23.34 per share, matching the price of the original 2018 award.
If the courts eventually reinstate the 2018 plan, this new award will either be forfeited or offset to avoid duplication.
The decision to offer Musk the package came from a two-member committee made up of board chair Robyn Denholm and independent director Kathleen Wilson-Thompson. They acknowledged Musk’s competing demands but defended the grant.
“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 this award will incentivise Elon to remain at Tesla,” the filing said.
Elon Musk, who controls about 13% of Tesla shares, has made it clear that retaining his leadership means increasing his voting power. This latest award aims to do just that, and fast, especially with an upcoming shareholder meeting scheduled for November 6, where a longer-term compensation plan will be tabled.
Tesla’s transition is ideological. Musk has reportedly shelved plans for a low-cost EV in favour of the “Cybercab,” a futuristic, steering-wheel-free robotaxi due to begin production in 2026.
But can a company that was built on disrupting the auto industry survive while its founder is pulled in a dozen directions—from SpaceX to Neuralink, xAI to X (formerly Twitter), and now, even into U.S. politics, where Musk’s recent endorsement of Donald Trump and formation of a new party have split opinion.
