Elon Musk’s new $29 billion Tesla pay package reignites controversy after a court blocked his 2018 compensation plan. Here’s what’s happening and what it means for Tesla’s future.
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Introduction: Musk’s Mammoth Payday
Tesla has once again thrust Elon Musk into the spotlight by awarding him a staggering $29 billion compensation package — a move that’s reigniting both investor enthusiasm and shareholder outrage. The announcement comes as Musk is still battling in court over a previously blocked 2018 performance award, which some investors claimed was excessive and poorly justified.
Despite legal uncertainties, Tesla’s board is doubling down on its support for Musk, saying he deserves the package for steering the company through an era of “transformative and unprecedented growth.” This development raises broader questions about executive pay, corporate governance, and Tesla’s shifting priorities in 2025.
The Breakdown: What’s in Musk’s $29 Billion Package?
Elon Musk’s compensation doesn’t come in the form of a traditional salary or yearly bonus. Instead, it’s a massive stock option package:
- 96 million stock options
- Exercise price: $23.34 per share (matching the 2018 award)
- Current TSLA share price: Over $300
That means Musk can buy the shares at a steep discount — turning paper into billions.
But there’s a catch: Musk only benefits if he stays with Tesla and continues to hit long-term performance goals.
Why Now? Timing Raises Eyebrows
The timing of this pay package is significant. In recent months:
- A Delaware court twice blocked his 2018 pay deal after a shareholder lawsuit.
- Tesla’s stock fell 25% in 2025 alone.
- Musk became heavily involved in US politics, which upset some shareholders.
- EV tax incentives were slashed under President Trump’s domestic policy, hitting Tesla’s revenue.
Despite these headwinds, Tesla’s board argues that Musk has earned every penny.
Tesla Board’s Justification: “He Delivered”
In a letter to shareholders, board members Robyn Denholm and Kathleen Wilson-Thompson emphasized:
“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.”
They argue that Musk’s leadership created immense value — not just for Tesla but for the broader energy and auto industries.
Investor Backlash & Political Fallout
But not everyone is buying it.
Many shareholders are still angry over Musk’s perceived distraction from Tesla. His outspoken political views and large campaign donations to Republican candidates sparked protests and calls for him to step down.
- Protests at Tesla dealerships surged in 2025
- Political controversies coincided with a slump in EV sales
- Tesla’s dependence on regulatory credits and tax incentives is now a liability
Tesla’s core brand — once synonymous with innovation — has been tarnished by political baggage.
Legal Limbo: The 2018 Pay Plan Still in Play
Musk’s 2018 pay package — one of the largest in corporate history — was struck down in Delaware after a court ruled it was improperly approved. Tesla is now appealing the decision.
The new $29 billion plan appears to mirror the original one, with few changes.
That raises the question: is Tesla effectively ignoring the court’s ruling?
Tesla insists its “legal efforts continue,” but offered no clear timeline for resolution.
The Bigger Picture: Tesla’s Shift from Cars to AI
At the core of this pay package is Tesla’s ambition to transform from a carmaker into a tech powerhouse.
“Tesla is transitioning from its role as a leader in the electric vehicle and renewable energy industries to grow towards becoming a leader in AI, robotics and related services.”
The company has:
- Started rolling out a robotaxi service (though in limited form)
- Invested heavily in AI chips and robotics development
- Reorganized teams to reduce reliance on vehicle sales
Market Reaction: A Glimmer of Optimism?
Despite a rough year, Tesla’s stock rose nearly 3% in premarket trading after the news.
This suggests:
- Some investors still believe in Musk’s long-term vision
- There’s hope Tesla’s pivot to AI and robotics could pay off
Still, a 25% drop in 2025 is hard to ignore.
FAQ: What You Need to Know
Q: How much is Elon Musk being paid?
A: The new compensation package is worth around $29 billion, mostly in stock options.
Q: Is this package legal given the court ruling?
A: It’s currently in legal limbo. The 2018 plan was struck down, and Tesla is appealing.
Q: Why doesn’t Musk take a salary?
A: Musk prefers stock-based compensation tied to performance milestones.
Q: What are shareholders saying?
A: Mixed reactions. Some praise his vision; others criticize his politics and distraction.
Q: What’s next for Tesla?
A: A major shift toward AI and robotics, and away from traditional car manufacturing.