Tesla grants Elon Musk interim $29B pay package amid ongoing legal fight
Tesla has granted CEO Elon Musk an interim pay package valued at about $29 billion in stock, despite an ongoing legal battle over his record-breaking 2018 compensation plan.
The move, disclosed in a filing on Sunday, awards Musk 96 million Tesla shares that will vest over the next two years, provided he remains CEO or serves in another key executive role at the company.
The award comes as the Delaware Supreme Court reviews the case that could determine whether Musk will ultimately secure an even larger $56 billion pay deal granted six years ago.
Shares rise as interim award announced
Tesla’s stock gained roughly 2% on Monday following news of the award.
According to the filing, the shares will only vest if Musk continues in a leadership role, and the package will be forfeited if the court rules that he can exercise the larger 2018 pay package.
That earlier deal had been approved by Tesla shareholders in June 2024, but its legality remains contested.
The dispute stems from Tornetta v. Musk, a case brought against the 2018 agreement.
In January 2025, Delaware Chancery Court Chancellor Kathaleen McCormick upheld a prior ruling that the deal was improperly granted.
She described it as “the largest potential compensation opportunity ever observed in public markets,” noting it was 33 times higher than the next-biggest comparable package — Musk’s prior pay deal.
Background to the $56 billion pay plan
Musk’s 2018 pay package was structured entirely around performance-based targets, which required Tesla to meet ambitious milestones in market capitalisation, revenue, and adjusted EBITDA.
All these targets were achieved, giving Musk the right to exercise the full package if it survived legal challenges.
The original award was valued at $56 billion, the largest ever for a public company executive.
Critics argued that the process of approving it was flawed, while supporters claimed it was a key incentive that helped Tesla grow into one of the most valuable companies in the world.
In June 2024, despite ongoing litigation, Tesla shareholders voted to reapprove the package, signalling strong investor backing.
However, the Delaware court maintained its position that the plan had been improperly approved.
Case now before the Delaware Supreme Court
The legal battle has now moved to the Delaware Supreme Court, which will decide whether Musk can retain the $56 billion award or if it should be voided.
If the court sides with Musk, the newly announced $29 billion interim package would be forfeited.
Tesla’s decision to grant this interim award ensures that Musk remains incentivised to stay with the company while the case plays out.
The company stated that the vesting period and conditions are designed to provide stability in leadership during what is expected to be a lengthy appeals process.
A decision from the Delaware Supreme Court could have significant implications, not only for Musk’s personal wealth but also for how executive compensation packages are structured and approved in publicly traded companies.
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