Elon Musk, Tesla CEO
Tesla has granted its CEO, Elon Musk, a new share award worth $29 billion (approximately £21.7 billion) in a strategic move to retain the billionaire entrepreneur amid intensifying competition for top artificial intelligence (AI) talent.
The electric vehicle and technology company announced the award days after a Delaware court invalidated Musk’s previous 2018 pay package, which was originally valued at more than $50 billion.
The court had ruled the earlier deal was “unfair to shareholders.” Musk is appealing that ruling, arguing that shareholders, not the courts, should have the final say on executive compensation.
Unmatched leadership and technical expertise
Tesla’s board defended the new deal in a public statement shared on X, the social media platform also owned by Musk. “It is imperative to retain and motivate our extraordinary talent, beginning with Elon,” the board stated. “No one matches Elon’s remarkable combination of leadership experience, technical expertise, and ability to build revolutionary and profitable businesses.”
The new package, according to the board, aims to incentivise Musk to remain fully committed to Tesla, especially as the company shifts its focus beyond electric vehicles toward AI and robotics.
The company added that if the Delaware court reinstates Musk’s earlier $56 billion award, he would either forfeit or return the new share package to avoid receiving both.
A company at an inflexion point
Tesla emphasised that the company is currently at an “inflexion point,” transitioning from an EV manufacturer to a leader in AI and robotics. The new share award is designed to reflect this strategic shift and ensure Musk’s continued leadership during the transformation.
“In the face of intensifying competition for AI talent, we are confident this share package will incentivizeincentivisemain at Tesla,” the company noted, pointing to increasing poaching efforts from tech giants such as Meta, Microsoft, and OpenAI.
AI talent war intensifies
Tesla’s move mirrors a broader trend in the tech industry, where firms are offering massive pay deals to secure top talent in AI. Meta CEO Mark Zuckerberg has reportedly offered million-dollar compensation packages to lure developers from OpenAI. Microsoft, under its new AI head Mustafa Suleyman, has also made high-profile hires from Google.
Multiple demands on Musk’s time
The Tesla board acknowledged Musk’s busy portfolio, he also holds executive positions at Neuralink, The Boring Company, and AI startup xAI—but maintained that retaining him at Tesla was essential for the company’s future.
“Elon’s continued focus is critical as we shape the next era of innovation at Tesla,” the board concluded.