Tesla CEO Elon Musk with Model S in Hong Kong.Nora Tam/South China Morning Post via Getty Images.
Tesla Stock Award Aims to Secure Executive Commitment
In a regulatory filing, Tesla disclosed the approval of 96 million restricted stock options for Musk. These shares will be purchased at a fixed strike price of $23.34, mirroring the structure of the 2018 CEO performance grant that was nullified by a Delaware judge earlier this year.
The new award will vest over two years, with an additional five-year holding requirement.
The stock award was announced as a “good faith” interim measure by Tesla’s board committee, composed of Chair Robyn Denholm and board member Kathleen Wilson-Thompson.
The board emphasized the need to retain Musk’s focus and leadership as the company navigates a competitive AI landscape and advances its transition into robotics and autonomous systems.
Elon Musk Award Reflects Urgency in Retaining Leadership
In a letter to shareholders, the committee stated that Musk remains central to Tesla’s innovation trajectory and talent retention efforts. “Losing Elon would not only mean the loss of his talents but also the loss of a leader who is a magnet for hiring and retaining talent at Tesla,” the letter noted.
The board cited the “ever-intensifying AI talent war” and called the award a critical step in maintaining the CEO’s engagement.
The interim stock award will be forfeited if the 2018 compensation plan—previously valued at nearly $56 billion—is reinstated upon appeal. A longer-term CEO compensation strategy is expected to be put to a shareholder vote during Tesla’s annual meeting on November 6.
Market Reaction and Governance Context
Tesla shares rose over 2 percent in premarket trading on Monday following the announcement, climbing to $309.31. Despite this uptick, Tesla stock remains down more than 20 percent year-to-date. The company framed the interim award as a bridge until shareholders can vote on a revised plan, amid calls for tighter oversight of executive compensation.
Musk, currently the world’s richest person with an estimated net worth of $398 billion, has faced scrutiny over his leadership across multiple companies.
Nonetheless, the board affirmed that no other executive matches Musk’s vision and impact on Tesla’s trajectory, particularly as it scales its artificial intelligence and energy solutions.
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The interim award serves as both a retention tool and a message to investors that Tesla’s leadership is aligned on preserving continuity at a critical point of transformation.
