Tesla, the electric vehicle manufacturer, has disclosed in a filing to the U.S. Securities and Exchange Commission (SEC) that its board of directors approved a stock-based compensation plan worth over $29 billion for Chief Executive Officer Elon Musk on Monday. This move aims to secure Musk's continued leadership during Tesla's pivotal transition to autonomous taxis and robotics.

The plan includes 96 million restricted stock units (RSUs), constituting roughly 3% of Tesla's total shares, classified as an 'interim award.' The key terms stipulate that Musk must remain as CEO or in an executive role approved by the board (e.g., head of product development or operations) until August 3, 2027. The share price is set at $23.34, in line with the 2018 compensation plan, totaling a purchase cost of approximately $2.241 billion (around RMB 16.086 billion). These shares cannot be transferred or sold for five years but can be utilized for tax payments or exercise costs.

Should the Delaware court ultimately reinstate the 2018 performance awards (initially valued at up to $56 billion), this interim award will be forfeited to prevent Musk from benefiting twice. Based on Monday's closing price of $309.26 per share, these shares are valued at $29.5 billion (approximately RMB 213.1 billion), increasing Musk's shareholding percentage from 12.7% to over 15%.

From $56 Billion to $29 Billion: A Revised Compensation Plan

This compensation plan is an adjustment to the 2018 incentive plan, which originally set 12 market value and operational targets. Upon achieving all targets, Musk would have received options worth approximately $56 billion. However, in 2024, the Delaware court voided the plan due to 'lack of board independence,' criticizing Musk for negotiating overly favorable terms with directors lacking independence.

Musk appealed in March 2025, highlighting the plan's 'remarkable growth' for Tesla. In response to legal risks, Tesla's board established a special committee (comprising independent directors Robyn Denholm and Kathleen Wilson-Thompson) to reformulate the compensation agreement under Texas law. The new plan, featuring 'interim awards + conditional triggers,' addresses both Musk's control needs and shareholders' concerns about governance transparency.

In a letter to shareholders, Tesla directly stated, 'Retaining Elon at this stage is more important than ever.' Tesla is transitioning from an electric vehicle manufacturer to a 'tech + energy' integrated enterprise, with autonomous taxis (Robotaxi) and robotics (like the Optimus humanoid robot) as strategic priorities.

Nevertheless, the company faces several challenges. The share price has declined nearly 25% this year, underperforming market benchmarks. Musk's political stances, such as supporting Trump, have sparked controversy, eroding brand loyalty. Additionally, traditional automakers and new entrants are intensifying their electrification efforts.

Campbell, an analyst at Camelthorn Investments, noted, 'Investors have benefited from Musk's management, and this compensation will ensure his focus on Tesla over the next two years.' Tesla's board also emphasized that while Musk leads companies like SpaceX and xAI, his 'diversity of business projects and interests' will not detract from his commitment to Tesla.

Following the plan's announcement, Tesla's share price rose 2.2% on Monday, reflecting positive market expectations for Musk's continued leadership. The London Stock Exchange Group (LSEG) calculated that if Musk completes the five-year lock-up period, his personal wealth will be further tied to Tesla, potentially alleviating concerns about his 'distraction by other projects.'

Industry analysts view this compensation plan as not only a legal compromise but also Tesla's response to the 'founder dependency syndrome.' Before autonomous driving and robotics achieve large-scale profitability, Musk's strategic vision and technical judgment remain Tesla's key competitive advantages. As the board stated, 'This award will incentivize him to continue leading Tesla through the transition period and towards the next growth phase.'

Securing Musk's Leadership: A Bet on the Next Decade of Transformation

Tesla awarded Elon Musk a stock option compensation plan worth over $29 billion. This sum is equivalent to nearly twice Tesla's full-year net profit in 2024 and sets a new global record for executive compensation. While it may seem like an 'astronomical year-end bonus,' it is actually Tesla's strategic investment in Musk's leadership during the transition to key technologies like autonomous driving and robotics.

This plan is a revision of the 2018 incentive plan, which originally set 12 market value and operational targets. Had all targets been met, Musk would have received options worth approximately $56 billion. However, in 2024, the Delaware court voided the plan due to 'lack of board independence,' criticizing Musk for negotiating overly favorable terms.

Tesla's board subsequently established a special committee to reformulate the compensation agreement under Texas law. The new plan, through 'interim awards + conditional triggers,' addresses both Musk's control needs and shareholders' governance transparency concerns. In his March appeal, Musk emphasized, 'Without me, Tesla could not have achieved the breakthrough from 0 to 1, let alone challenged the century-old structure of the traditional automotive industry.'

As Tesla transitions from an electric vehicle manufacturer to a 'tech + energy' integrated enterprise, with autonomous taxis (Robotaxi) and robotics (such as the Optimus humanoid robot) as strategic focuses, the company faces challenges. The share price has declined nearly 25% this year, underperforming market benchmarks. Musk's political stances have sparked controversy, eroding brand loyalty. Traditional automakers and new entrants are accelerating their electrification efforts.

Against this backdrop, the board believes that 'retaining Musk is more important than ever.' Campbell, an analyst at Camelthorn Investments, noted that 'Investors have benefited from Musk's management, and this compensation will ensure his focus on Tesla over the next two years.' The London Stock Exchange Group calculated that if Musk completes the five-year lock-up period, his personal wealth will be further tied to Tesla, reducing concerns about his 'distraction by other projects.'

This compensation plan is not only a legal compromise but also Tesla's strategy to address the 'founder dependency syndrome.' Before autonomous driving and robotics become profitable, Musk's strategic vision and technical judgment remain Tesla's critical competitive advantages. As the board stated, 'His diversity of business projects and interests will not affect his commitment to Tesla, as it aligns with his vision to 'change the world.'