Tesla has handed Elon Musk 96 million shares worth around $29 billion in an effort to keep him as CEO amidst ongoing legal issues surrounding his previous compensation.
New Compensation Structure for Elon Musk
The new award, approved by the board and disclosed in a filing, is nearly identical to the 2018 deal that a Delaware judge threw out in 2024 for being unfair to shareholders. The court stated that the process at the time was flawed, with board members too close to Musk to act independently.
The board’s special committee stated in the filing, "While we recognize Elon’s business ventures, interests, and other potential demands on his time and attention are extensive... we are confident that this award will incentivize Elon to remain at Tesla."
Musk must pay $23.34 per share to get the stock to vest, which would require him to spend billions from his own pockets if he wants to unlock the full grant.
Changes in Tesla's Business Strategy
This new stock package is also structured to gradually give Elon more voting power. Both he and other shareholders have argued that increasing his control is necessary to keep him focused on Tesla’s long-term goals.
The company has shifted its business strategy, now moving away from plans for low-cost electric vehicles, turning its attention to robotaxis and humanoid robots. Tesla has begun to rebrand itself more as a robotics and AI platform rather than a traditional automaker, making Musk’s presence even more critical.
Challenges in China Market
Tesla’s sales in China continue to slide. In July 2025, the Shanghai plant shipped 67,886 units, an 8.4% drop compared to the same month last year.
This decline is tied to heavier competition from local manufacturers like BYD and Xiaomi, as the overall EV market in China is experiencing a boom, with sales jumping 25%. Tesla’s market share is shrinking rapidly, facing challenges both in China and globally, partly due to Musk’s political activities.
In conclusion, Tesla's new stock package for Elon Musk aims to keep him as CEO despite legal and market challenges, while the company grapples with significant issues in key markets like China.
