Tesla’s $29 Billion Bet on Elon Musk: Compensation Amid Controversy and Change
Tesla’s board has reignited the spotlight on CEO Elon Musk with the approval of a massive new pay package worth approximately $29 billion, despite ongoing legal challenges and recent turbulence for the company. The package, which echoes Musk’s previously contested 2018 compensation plan, comes at a pivotal moment for Tesla as it struggles with declining sales and a strategic shift away from car manufacturing.
A Legal Tug-of-War
The announcement comes just months after a Delaware court struck down the 2018 CEO performance award, citing concerns raised by shareholders. Although Musk is appealing the decision, Tesla’s board has signaled firm support for reinstating the package. In a letter to shareholders, Tesla claimed Musk has received “no meaningful compensation for eight years”, and described the company’s legal efforts as ongoing with “no clear timeline for resolution.”
Under the terms of the deal, Musk would receive 96 million Tesla shares at an exercise price of $23.34 per share—far below the current trading value of just over $300 per share.
Tesla’s Struggles: Politics, Sales, and Shareholder Concerns
While Musk’s leadership has undeniably brought monumental growth to Tesla over the past decade, recent years have seen a shift in focus that unsettled many investors. Musk’s foray into U.S. politics in 2024 and early 2025, where he supported Republican candidates, has sparked backlash. Tesla dealerships have faced ongoing protests, and the political environment has turned hostile: President Trump’s new policy agenda removes EV tax incentives and emissions credits, which were once major drivers of Tesla’s revenue.
These factors have had a tangible impact: Tesla stock (TSLA) is down 25% year-to-date, and the company faces declining vehicle sales.
The Return of Musk and a New Vision
In response to investor criticism, Musk has promised to refocus on Tesla full-time. The new pay package is seen by many as a way to secure his attention and commitment at a time when the company needs a strong hand on the wheel.
Board members Robyn Denholm and Kathleen Wilson-Thompson defended the decision, stating:
“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.”
More importantly, Tesla is evolving. With vehicle demand falling and EV competition heating up, the company is shifting focus to AI, robotics, and services, including its much-anticipated robotaxi platform. Though the rollout is reportedly more modest than Musk once promised, it marks a clear pivot toward a future beyond cars.
“Through Elon’s unique vision and leadership, 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,” Denholm and Wilson-Thompson added.
What’s Next for Tesla?
Tesla’s new direction could either reignite growth or deepen its current crisis, depending on execution and market reception. Meanwhile, Musk’s new pay package—and the drama surrounding it—highlights the complex relationship between charismatic leadership, shareholder value, and public scrutiny.
For now, Tesla remains at a crossroads, and once again, Elon Musk is at the center of the story.
