Elon Musk Gets $29 Billion Tesla Stock Grant Amid Falling Sales and Growing Challenges
Tesla has once again created a stir in the corporate world by giving CEO Elon Musk 96 million new shares worth about $29 billion at a time of turmoil for the company. The hefty grant comes after months of controversy, falling stock market performance and an ongoing transformation from a carmaker to a giant in the world of artificial intelligence and robotics.
While investors and Musk fans may see this as a bold move to retain a visionary leader, critics are raising questions: Why is Tesla offering such a huge package amid falling sales, a declining stock price and political turmoil? Let’s find out what this means for Musk, Tesla and its shareholders.
The $50 Billion Pay Package That Was Struck Down
To understand the reality of the new compensation, it’s a look at the past. In 2018, Musk was given a $50 billion pay package—the largest in county history. But earlier this year, a Delaware court struck down that deal, deciding the process behind it lacked independence and was unfair to the principal.
The judge said the board failed to keep its distance during negotiations and Musk exerted too much influence in the decision. This prompted the Illinois board to reconsider Musk’s compensation structure in the front room.
A New $29 Billion Deal – With Strings Attached
Now, the board has offered Musk a new deal: 96 million Tesla shares, worth about $29 billion. But this is no gift.
Here are some key details:
- Musk must stay in a key executive role through 2027 to receive the shares.
- He must pay $23.34 per share, the same exercise price as the 2018 deal.
- If the courts reinstate the previous package, this new grant will be voided or adjusted to avoid a “double dip.”
- Musk must hold the shares for five years, unless selling to cover taxes or the purchase price.
The board’s special committee explained in a regulatory filing that despite Musk’s many business interests—including SpaceX, Neuralink, and X—this package is designed to keep him focused on Tesla.
Tesla’s Changing Identity: Not Just a Carmaker Anymore
A major reason behind the new deal is Tesla’s strategic shift. The company is no longer trying to become the world’s largest electric vehicle maker. Instead, Musk is moving Tesla towards becoming a leader in AI and robotics, and focusing on products such as robotaxis and humanoid robots.
This is a major shift from Tesla’s earlier promises to provide affordable electric vehicles to the general public. Critics argue that the move abandons the original mission and alienates middle-class buyers, especially when electric vehicle competition is increasing globally.
Why Now? Tesla Faces a Storm
The timing of this announcement is crucial. Tesla is currently navigating one of its roughest patches in years:
1. Falling Sales & Poor Product Reception
Tesla sales have dipped as rivals like Hyundai, BMW, and BYD roll out newer, more affordable EV models. The highly anticipated Cybertruck, Tesla’s first new vehicle since 2020, has failed to impress. Despite Musk predicting hundreds of thousands in sales, the market reception has been lukewarm.
2. Stock Performance
Tesla’s stock is down nearly 25% this year. Investors are nervous about the company’s future, especially with Musk spending increasing time on other ventures. This decline adds pressure on the board to restore confidence.
3. Political Pressure
Musk’s public endorsement of Donald Trump has sparked political backlash. Tesla has lost brand loyalty, with protests at dealerships and declining popularity among left-leaning consumers. According to S&P Global Mobility, brand loyalty fell sharply after Musk aligned with Trump.
To make matters worse, Trump’s proposed policies would strip Tesla of federal subsidies for EVs—another financial blow for a company already struggling with declining demand.
Is This Really Good for Shareholders?
Many are wondering whether such a large grant is justified. Tesla says the stock award is performance-based, meaning that unless the stock price and company performance improve, Musk will receive nothing. However, critics argue that this pretense is wrong: rewarding a CEO in the midst of declining sales and growing uncertainty.
In addition, giving Musk more shares increases his voting power, which some fear will give him even more unchecked control over Tesla’s direction.
Musk’s Take: All or Nothing
Elon Musk is known for demanding control. In recent months, he has publicly indicated that he would not make a long-term commitment to Tesla unless he gets more voting power—at least 25%. This new package helps him get closer to that goal.
Musk argues that without such control, he cannot take Tesla through important developments in AI and robotics. Whether you consider this ambition or arrogance depends on your perspective, but Musk’s influence over Tesla is undeniably enormous.
What’s Next for Tesla?
The next few years are critical. Tesla is betting big on its autonomous driving software, hoping it will soon bring in meaningful revenue. But regulators, consumers, and competitors will all play a role in determining how successful this pivot will be.
In the short term, Tesla will need to:
- Win back consumer trust.
- Navigate political uncertainty.
- Deliver on self-driving promises.
- Introduce innovative products that sell.
The $29 billion grant to Musk signals that Tesla’s board is willing to double down on Musk, despite the risks.
A Bold Gamble or a Necessary Move?
Tesla’s decision to give Elon Musk a new $29 billion stock package is a bold and controversial move at a crucial juncture. With sales falling, political tensions rising, and product uncertainty growing, the company is betting that Musk’s leadership is the best path forward.
But with so much power and money concentrated in the hands of one person, there’s little room for error. Whether this deal will help Tesla thrive or further complicate its future remains to be seen.
One thing is clear: Elon Musk isn’t going anywhere. And neither is the debate over Tesla’s leadership under him.
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