Board defends record-setting reward despite legal battles
Tesla has approved a controversial new pay package for CEO Elon Musk worth $29 billion, igniting debate among shareholders just months after a Delaware court blocked his earlier $56 billion compensation agreement. The electric vehicle maker shared details in a letter to investors, highlighting Musk’s leadership in delivering “transformative growth” since 2018.
The new agreement allows Musk to purchase 96 million Tesla shares at just $23.34 each — a steep discount from the current trading price above $300. This mirrors the structure of his 2018 package, which remains contested in court. Tesla emphasized that Musk has received no meaningful compensation in eight years and framed the award as performance-based.
Legal risks mount following fatal crash ruling
The announcement arrives shortly after Tesla was ordered to pay $329 million to the families of victims in a 2019 crash involving a Tesla vehicle. The court’s decision has placed further scrutiny on Tesla’s executive practices and safety record. Musk’s new pay plan, valid for two years or until the 2018 award is reinstated, has reignited concerns over corporate governance.
Critics argue the timing is tone-deaf. The generous equity award comes while the company faces both reputational damage and legal risk — elements that could impact future valuations and investor trust.
Politics hurt Tesla’s financial and public image
Shareholder confidence in Musk has eroded due to his political involvement. After accepting a cabinet position under President Donald Trump, Musk drew criticism for sidelining Tesla during a critical growth phase. His role as head of the Department of Government Efficiency sparked internal unrest and public protests at Tesla dealerships.
In parallel, Trump’s domestic policies rolled back regulatory credits, a financial lifeline for electric vehicle makers. As a result, Tesla’s stock has dropped 25% in 2025, and its public image has suffered setbacks.
Musk returns focus to Tesla with robotaxi launch
With political duties now behind him, Musk has pledged to re-engage full-time with Tesla and its affiliated ventures. The company is currently rolling out a robotaxi service in several cities — a key step in expanding its AI-driven transportation vision. Investors will be watching closely to see if Musk’s renewed focus and the ambitious robotaxi initiative can reverse recent setbacks.
Still, the size of the new pay package and the ongoing legal battles may continue to weigh on shareholder sentiment, especially as Tesla seeks to navigate a rapidly changing automotive and regulatory landscape.
