Tesla has offered its CEO Elon Musk a new pay package worth around $29 billion. This deal includes 96 million Tesla shares and is designed to encourage
Musk to stay focused on the company, especially at a time when he is facing legal issues over his previous pay agreement. The company’s board said that this fresh pay deal is necessary because of growing competition in the artificial intelligence (AI) industry. In a letter to shareholders, board members Robyn Denholm and Kathleen Wilson-Thompson said that the battle to hire top AI talent is getting tougher. They said that companies are now offering huge cash packages and even buying other businesses to attract skilled engineers. Tesla’s board said they want Musk to stay committed to the company’s long-term future, even though he is involved in other businesses like SpaceX and X (formerly Twitter). The board said this new deal will help keep his attention on Tesla.
Tesla's $50 Billion Pay Deal Promise in 2018
Back in 2018, Tesla had promised Musk a $50 billion pay deal if he met certain goals. But earlier in 2025, a court in Delaware cancelled that agreement. The judge said Tesla’s board did not properly protect shareholders’ interests when they approved the earlier deal.
Musk disagreed with the court’s decision and filed an appeal in March, saying that the judge made legal errors. While that case continues, Tesla formed a special committee to figure out a new way to handle Musk’s pay.
Musk Already Owns 13% of Tesla's Shares
Musk already owns about 13% of Tesla’s shares. If he receives the new 96 million shares, his voting power in the company will grow even stronger. Some investors support this, saying that Musk’s leadership and vision are key to Tesla’s future.
Tesla is no longer just focusing on electric vehicles. Musk has stepped away from plans to launch a low-cost EV model and is instead pushing more into technology areas like robotaxis and humanoid robots. His aim is to transform Tesla into a tech and AI company rather than only a carmaker.
However, Musk will have to pay $23.34 for each share he receives, the same price he was required to pay under the earlier 2018 agreement.
