Board’s $29B Payout to Musk Aims to Counter Brand Damage from His Politics

In a significant move, Tesla’s board of directors has approved a new $29 billion stock award for CEO Elon Musk, a decision made after a U.S. court invalidated his previous pay package. In a letter to shareholders, the board acknowledged concerns about Musk’s divided attention and political activities, framing the new award as a way to address these issues. The award is a “good faith” payment, allowing Musk to acquire 96 million shares at the original 2018 price for $2 billion.
The decision was recommended by a special committee, which included chair Robyn Denholm and director Kathleen Wilson-Thompson. They stated that the award is a “critical first step” toward “keeping Elon’s energies focused on Tesla.” The board believes this new compensation package will be a powerful incentive for Musk to remain at the company and secure his long-term commitment.
The company’s brand has reportedly suffered, with reports suggesting that Musk’s political endorsements and his relationship with Donald Trump have negatively impacted Tesla’s sales and reputation. A survey from S&P Global Mobility showed a sharp decline in customer loyalty, with the percentage of repeat buyers falling significantly. An analyst described this drop as “unprecedented,” highlighting the challenges the company faces due to its CEO’s public persona.
The new shares will boost Musk’s ownership stake from 13% to around 15%, giving him greater voting power. Musk has consistently argued that more control is necessary to protect the company from activist shareholders as it pivots its strategy toward AI and robotics. The board’s letter confirms that the award is designed to gradually increase his influence, ensuring his leadership. This new compensation package will be forfeited if the original 2018 deal is reinstated.