Elon Musk, the polarizing CEO of Tesla and tech billionaire, has been awarded a $29 billion pay package, making headlines yet again for both his staggering compensation and the strategic pivot Tesla is undergoing under his leadership. This latest development follows months of legal wrangling over a previous 2018 performance award that was blocked by a Delaware court.
Tesla Reinstates Compensation Amid Legal Appeal
Despite a legal battle over Musk’s original 2018 compensation plan, Tesla’s board decided to issue a new pay package. The $29 billion deal grants Musk 96 million shares of Tesla at a fixed purchase price of $23.34 per share—significantly lower than the current market price, which hovers just above $300.
In a letter to shareholders released Monday, Tesla board members Robyn Denholm and Kathleen Wilson-Thompson defended the move, 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.”
This latest move is seen as a bid to secure Elon Musk’s full-time focus on Tesla, which has been struggling amid political backlash and a steep drop in sales.
Shareholders Divided as Elon Musk Returns Focus to Tesla
For much of 2024 and early 2025, Elon Musk had shifted attention toward U.S. politics, throwing both his money and influence behind Republican candidates. While largely successful in political circles, this involvement had unintended consequences for Tesla. Political demonstrations at dealerships and shifting federal policies under President Trump stripped the company of valuable EV tax incentives and regulatory credits.
These challenges translated into a sharp 25% drop in Tesla’s stock this year. Monday’s announcement, however, temporarily lifted investor sentiment, with shares rising nearly 3% in premarket trading.
Pivot to AI and Robotics: A New Era for Tesla
With Elon Musk back at the helm full-time, Tesla is undergoing a major transformation. Musk is now steering the company away from its dependence on electric vehicle sales and toward artificial intelligence, robotics, and autonomous technologies. Tesla’s long-awaited robotaxi service is in the early stages of rollout, albeit on a more modest scale than originally promised.
The board emphasized that this strategic shift reflects Musk’s broader vision:
“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.”
Why the $29 Billion Matters
This $29 billion pay package isn’t just a financial reward—it’s a strategic play to retain Elon Musk during one of the most crucial turning points in Tesla’s history. Musk, who doesn’t receive a cash salary or bonus, relies heavily on stock options for compensation. With around 13% ownership of Tesla, his leadership remains tightly interwoven with the company’s fortunes.
Tesla’s future is uncertain, but with Musk recommitted and a bold new direction laid out, the company hopes to reignite growth and innovation. The question now is whether this pay package will be enough to turn the tide amid falling sales, legal scrutiny, and shifting political landscapes.
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