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Chief executive officers

Tesla Board Approves $30bn Share Award for Elon Musk

Strategic Insights

— 1 min read

After a US court ruling, Tesla's board has approved a $30bn (£23bn) share award for its CEO, Elon Musk, following a prior pay deal worth $56bn that was rescinded in 2024. The award is seen as a "good faith" payment to Musk after the previous deal was invalidated. The payment will increase Musk's voting power, which he and shareholders have consistently cited as essential for keeping him focused on Tesla's mission.

Key Takeaways:

  • The award is worth $30bn, based on a share price of $308 in pre-market trading, and is designed to increase Musk's voting power, a key factor in keeping him focused on Tesla's mission.
  • The payment was approved by Tesla's board after a US court ruled against the previous pay deal, which was worth $56bn and was agreed upon in 2018.
  • The award has been criticized by some shareholders, who have expressed concerns about Musk's focus on other ventures, including his foray into Republican politics and the development of robotaxis and humanoid robots.
  • Musk is Tesla's largest shareholder with a 13% stake in the company, and the award is seen as a way to incentivize him to remain at the helm of the electric carmaker.
  • The payment is a significant vote of confidence in Musk's leadership, despite concerns about his focus and the company's recent struggles, including a nearly 20% decline in share price this year.
  • The award is part of a broader shift in Tesla's focus towards artificial intelligence and robotics, with the company investing heavily in the development of robotaxis and humanoid robots.

Statistics:

  • The award is worth $30bn, based on a share price of $308 in pre-market trading.
  • The prior pay deal worth $56bn was rescinded in 2024 by a judge in Delaware.
  • Musk's stake in Tesla is 13%, making him the company's largest shareholder.
  • Tesla shares have fallen nearly 20% this year, but rose over 2% in premarket trading on news of the award.
  • A survey by S&P Global Mobility found that Tesla's customer loyalty plunged from 73% in June 2024 to 49.9% in March 2023, before edging back up to 57.4% in May 2023.

Sources:

  • Bloomberg billionaires index
  • Financial Times
  • Reuters
  • S&P Global Mobility
  • Tesla's financial filing
  • A shareholder letter from Tesla chair, Robyn Denholm, and Kathleen Wilson-Thompson
  • Interview with Tom Libby, S&P analyst

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