Tesla Approves Controversial $29 Billion Pay Package for Elon Musk Amid Legal Shifts
Tesla Approves Controversial $29 Billion Pay Package for Elon Musk Amid Legal Shifts
The Tesla board has approved a new, staggering $29 billion pay package for CEO Elon Musk, a move designed to secure his retention amidst an intense “war for AI talent.” This latest compensation deal comes after years of legal battles that saw a Delaware judge twice invalidate Musk’s previous mega-grant.
Unlike prior agreements that included significant performance benchmarks, this new award primarily mandates Musk’s continued employment as CEO or in a senior executive role for the next two years, along with holding the stock until 2030. Critics have quickly labeled this structure as a “fog-the-mirror grant” due to its notable absence of performance-based targets.
In a strategic maneuver to insulate the deal from future litigation, Tesla recently reincorporated from Delaware to Texas. Following Texas’s amendment of its business code in May 2025, Tesla adjusted its bylaws, imposing a new requirement that any shareholder challenging Musk’s compensation must hold at least 3% of the company’s stock, a stake valued at over $3 billion. Legal analysts suggest this shift to Texas, known for its more corporate-friendly laws, could significantly favor Tesla in potential future lawsuits.
The unprecedented compensation has ignited strong opposition from institutional investors. New York City Comptroller Brad Lander denounced the package as “obscene,” arguing the board is prioritizing Musk’s enrichment over investor interests, especially amidst Tesla’s recent stock decline and concerns over Musk’s focus. Illinois State Treasurer Michael Frerichs also criticized the $29 billion deal as “egregious,” urging the board to prioritize long-term company success and improved corporate governance over what he perceives as “fealty to a greedy CEO.”
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