Elon Musk’s Stock Award: A Strategic Move for Tesla’s Future

Tesla has put forward a plan to offer CEO Elon Musk a restricted stock award of 96 million shares, valued at approximately £29 billion, with the intention of securing his leadership role through 2027. This initiative arises as the company contests a Delaware court ruling that invalidated Musk’s initial £50 billion compensation package established in 2018, deemed flawed and excessively influenced by Musk himself.

Legal Battles and Shareholder Approval

Although shareholders approved the original agreement on two occasions, the court prohibited it earlier this year. Tesla is now appealing to the Delaware Supreme Court while simultaneously seeking shareholder approval for this new award. The board maintains that Musk’s ongoing involvement is vital as Tesla advances into the realms of artificial intelligence and robotics.

Board’s Confidence in Musk’s Leadership

The board chair, Robyn Denholm, alongside board member Kathleen Wilson-Thompson, conveyed in a communication to shareholders that, “While we acknowledge Elon’s various business ventures and the numerous demands on his time, we believe this award will motivate him to concentrate on enhancing shareholder value for Tesla and on attracting and retaining top talent within the company.”

Condition of the New Grant

If the Delaware courts reinstate Musk’s 2018 compensation package entirely, the interim grant may either be forfeited or adjusted to prevent what the board refers to as a “double dip.” Accepting the new award would require Musk to remain as CEO until at least 2027. Shareholders are set to vote on this proposal during Tesla’s annual meeting on November 6.

An Uncertain Climate for Tesla

This proposal surfaces during a challenging period for Tesla. The company’s sales have decreased significantly, amidst national protests concerning Musk’s political affiliations, including his backing of former President Donald Trump and his role in federal workforce reductions. Consequently, Tesla’s stock has dropped more than 20 percent in 2025. The only new product introduced since 2020, the Cybertruck, has faced substantial criticism, and the recently launched robotaxi service in Austin failed to meet Musk’s prior expectations.

Musk’s Vision for Control

Musk, who is Tesla’s largest shareholder with a 13 percent ownership stake, emphasised his desire for increased control over the company to protect its mission. He remarked, “This is a significant concern for me, as I’ve indicated previously, and I hope it is discussed at the upcoming shareholders’ meeting. I believe my influence over Tesla should be sufficient to ensure its positive trajectory, yet not to the extent that I cannot be removed if my judgement falters.”