Tesla has awarded CEO Elon Musk an interim compensation package worth approximately $29 billion at current share prices, as the company continues its efforts to resolve the legal dispute over his original 2018 CEO Performance Award.
In a new letter to shareholders, Tesla’s Board said it unanimously approved (with Elon and his brother Kimbal Musk recusing themselves) the issuance of 96 million restricted shares to Musk — roughly one-third of the 300 million shares tied to the 2018 award. That award, worth over $50 billion today, was approved twice by more than 72% of Tesla shareholders, but has remained in legal limbo due to ongoing litigation in Delaware courts.
“Despite overwhelming support from you in 2018 and again in 2024, our legal efforts continue in the Delaware courts to reinstate the 2018 CEO Performance Award,” Tesla wrote in its letter. “Despite these legal challenges, we can all agree that Elon has delivered the transformative and unprecedented growth that was required to earn all milestones of the 2018 CEO Performance Award.”
Earlier this year, Musk formally appealed a Delaware court ruling that voided the historic $56 billion compensation plan.
Under the terms of the 2025 CEO Interim Award, Musk will receive the shares at the same $23.34 per-share exercise price set in the original 2018 plan. The new award is subject to a two-year vesting period, during which Musk must serve in a senior leadership role at Tesla. There’s also a five-year holding period, with exceptions only for covering taxes or purchase costs.
If the Delaware Supreme Court fully reinstates the 2018 deal, this interim award will be forfeited to prevent any “double dip” and instead serve as an advance towards the original compensation of roughly 300 million shares.
Tesla emphasized the award’s strategic timing, calling it a “critical first step” toward retaining Musk’s leadership as the company transitions from EVs and energy into AI and robotics. Musk’s stake in the company will increase from 12.9% to about 14.6% after the shares vest — bringing him closer to his stated goal of 25% ownership for stronger voting control.
Tesla plans to present a longer-term CEO compensation strategy for a shareholder vote at its November 6 annual meeting.
