Quote from Alex bobby on August 5, 2025, 4:04 AM

Tesla Grants Elon Musk $29 Billion Share Award Amid AI Talent War and Pay Controversy

In a bold and controversial move, Tesla has granted its chief executive Elon Musk a massive $29 billion (£21.7 billion) stock award in a renewed effort to secure his commitment to the company as it faces fierce competition in the artificial intelligence sector. The grant comes amid an ongoing legal battle over Musk’s previous, record-breaking $56 billion pay deal, which was struck down by a Delaware court earlier this year.

Tesla announced the new award on Monday, stating it is “confident” that the fresh package “will incentivise Elon to remain at Tesla,” particularly as the “war for AI talent is intensifying.” With the company aiming to transition from being solely an electric vehicle manufacturer to an AI and robotics powerhouse, Musk’s leadership, the board insists, is indispensable.

“It is imperative to retain and motivate our extraordinary talent, beginning with Elon,” Tesla’s board wrote in a message posted to X (formerly Twitter), a social media platform owned by Musk himself.

The announcement underscores just how central Musk is to Tesla’s vision and future. With companies like Meta, Microsoft, and Google aggressively recruiting top AI experts — and reportedly offering million-dollar packages to lure talent from rivals — Tesla has decided to double down on its most powerful asset: Elon Musk.

A New Deal in the Shadow of a Controversial One

The $29 billion share grant comes just months after a Delaware court struck down Musk’s original 2018 compensation plan, ruling it was unfair to shareholders and criticising the Tesla board’s close ties to Musk. That now-invalidated deal had been valued at $56 billion, the largest CEO pay package in corporate history. It was structured around a series of ambitious milestones — including Tesla’s market cap, revenue, and adjusted earnings — which Musk ultimately met.

The court found that the process to approve that package was flawed and lacked proper safeguards. However, Musk has since appealed the decision, claiming the court misinterpreted the law and interfered with what should be a shareholder-driven matter.

Should the Delaware court reverse its ruling and reinstate the original deal, Tesla says Musk would forfeit or return the new $29 billion award to avoid what the company called a "double dip."

Locking Down Musk in the Age of AI

The timing of the award is no coincidence. Tesla says it is at an “inflection point” as it shifts its focus from electric vehicles toward AI and robotics. The company is investing heavily in projects like self-driving technology, humanoid robots (such as the Optimus prototype), and AI-based energy solutions.

Dan Ives, a tech analyst at Wedbush Securities, told the BBC that the new award was necessary if Tesla hoped to keep Musk at the helm.

“The biggest asset for Tesla is Musk,” Ives said. “The board needs to do this, and I believe it’s a huge step forward.”

He added that during this “AI arms race,” it would be detrimental for the company to have Musk only “semi-committed,” as rivals like Meta and Microsoft ramp up their own AI ambitions.

Indeed, Musk’s time and attention are increasingly divided. In addition to his role at Tesla, he is deeply involved in other ventures:

• xAI, his new artificial intelligence firm aiming to compete with OpenAI
• Neuralink, which focuses on brain-computer interfaces
• The Boring Company, a tunnelling and infrastructure startup
• X (formerly Twitter), where he continues to drive product changes and policy decisions

Tesla’s board acknowledged these competing demands but argued the new share award would help ensure that Musk continues to prioritise Tesla at this pivotal moment.

Shareholder Reactions and Corporate Governance Questions

The latest package raises familiar questions about executive compensation and corporate governance. Critics argue that the size of Musk’s rewards — and his ability to effectively influence the board — could erode shareholder confidence. After all, it was shareholder concerns that helped prompt the initial legal challenge to the 2018 package.

However, Tesla defends the grant as performance-based and justified, citing Musk’s “proven track record” in creating revolutionary and profitable businesses.

“No one matches Elon’s remarkable combination of leadership experience, technical expertise,” the board said.

Still, whether shareholders will fully support the move remains to be seen. In previous votes, Tesla’s investor base has generally backed Musk, albeit with growing concerns over governance, transparency, and Musk’s political entanglements.

Looking Ahead

With the global AI race accelerating, Tesla is betting big that Elon Musk is the one to lead it into the next era. The company’s transition from an electric vehicle leader to an AI-driven technology firm requires not just capital and code — but visionary leadership and long-term commitment. The $29 billion award, then, is not just compensation; it’s a signal that Tesla is all in on Musk, once again.

What remains to be seen is whether courts — and shareholders — will agree.

Final Thought:
Tesla’s latest move to retain Elon Musk shows how high the stakes have become in the AI era. As competitors lure talent and redefine tech leadership, Tesla is making a clear statement: its future is still tied to one man. Whether that bet pays off will shape not only the company’s trajectory but the broader direction of AI innovation.

Conclusion

Tesla’s $29 billion share award to Elon Musk marks a pivotal moment in the company’s evolution — and in the broader race for AI dominance. With rivals aggressively courting top talent and redefining the future of technology, Tesla is reaffirming that its success hinges on Musk’s continued leadership.

Yet the decision also reopens contentious debates around corporate governance, CEO compensation, and shareholder rights. As Musk’s legal battle over his previous $56 billion package continues, Tesla’s board is making it clear: they’re willing to stake billions to keep their visionary CEO firmly in place.

Whether this bold move will strengthen Tesla’s position in the AI arms race or deepen scrutiny over its governance remains to be seen. What’s certain is that the outcome will shape not just the future of Tesla, but the future of tech itself.

Meta Description:
Tesla grants Elon Musk a $29 billion stock award to secure his leadership amid an AI talent war and legal disputes over his record-breaking 2018 pay deal.