WASHINGTON: Tesla on Monday unveiled an interim $29 billion compensation package for Elon Musk, citing the urgent need to retain the CEO as the company pivots toward AI and robotics.
The EV maker said it will award Musk 96 million shares as a “good faith” payment while it appeals a Delaware court ruling that struck down his previous $55.8 billion pay plan from 2018.
Tesla described the move as a stopgap ahead of a broader, long-term CEO compensation strategy.
“Retaining Elon is more important than ever before,” the board said in a letter to shareholders. The letter, signed by Tesla directors Robyn Denholm and Kathleen Wilson-Thompson, called Musk a “magnet for hiring and retaining talent,” critical to Tesla’s shift beyond EVs toward artificial intelligence and automation.
Tesla’s decision comes amid intensifying competition for engineering talent, with rivals like Google and Meta racing ahead in AI development.
While Musk is widely credited for building Tesla and SpaceX into global giants, his leadership has faced growing scrutiny.
Tesla’s car sales and profits have slid, and the Cybertruck has underperformed. His public alignment with far-right politics has drawn backlash, including consumer boycotts and vandalism.
During Tesla’s July 23 earnings call, Musk warned of more “rough” quarters before the company’s AI bets begin to deliver returns. He also raised concerns over his equity stake, which stood at 13 per cent before Monday’s award. “I should have enough control to steer the company in a good direction—but not so much that I can’t be thrown out if I go crazy,” he said.
The board’s letter didn’t address the political controversies directly but emphasized the need to keep Musk focused on Tesla’s mission.
If the appeals court restores the 2018 pay plan, Musk would forfeit this new award. Still, the $29 billion package—granted as Tesla faces governance questions—has reignited debate over whether the board is exercising sufficient oversight over the world’s richest man.
Tesla shares rose 2.4 per cent on Monday. – AFP
