Tesla's $29 billion Musk-centric gamble
With sales slumping and its reputation battered, the EV automaker is betting big that its future depends on keeping capricious CEO Elon Musk happy — and wealthy


Elon Musk's unprecedented wealth is in large part tied up in Tesla, the electric vehicle manufacturer he has positioned at the center of his sprawling business empire. But Musk's dependence on Tesla as his primary earnings engine is something of a two-way street, particularly as the car company scrambles to hold its mercurial CEO's attention amid sliding sales, a slumping reputation and increased market competition.
In a Securities and Exchange Commission filing this week, Tesla's two-person Special Committee of the Board of Directors announced plans to award Musk millions of shares of company stock — estimated to be worth up to $30 billion — because, the committee claimed, he has "not received meaningful compensation" at the company for years. "Retaining" Musk at Tesla, the committee said, is "more important than ever."
An 'astounding' pay package
The newly announced award is a "first step, 'good faith' payment" to Musk, said Tesla board members Robyn Denholm and Kathleen Wilson-Thompson in a company filing. Musk's previous compensation package, estimated at $50 billion, has been tied up in Delaware courts since it was first announced in 2018. The new package offers Musk about one-third of the 2018 agreement, or "roughly 3 percent of the company," said The New York Times. It's an "astounding figure" but still far below Tesla's nearly $1 trillion market capitalization. Nevertheless, the package would likely "outstrip most or all pay packages for CEOs at publicly traded companies," said The Wall Street Journal, allowing Musk to retain his "distinction" of being the "highest-paid chief on record."
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This new compensation package will be "forfeited" by Tesla if Musk and the company prevail in Delaware courts and are allowed to exercise the 2018 deal, said CNBC. The newly proposed package is scheduled to vest in two years so long as Musk remains Tesla's CEO "or in another key executive position."
A 'crucial pivot' from a 'struggling core'
The Tesla board is focused on "keeping the billionaire entrepreneur at the helm" of the company amid a "crucial pivot from its struggling core auto business" to Musk's long-promised rollout of "robotaxis and humanoid robots," Reuters said. Tesla has faced sagging sales lately, "wrought by its aging vehicle line-up, tough competition" and "Musk's political stances" that have "alienated some potential buyers." Musk "caught the ire of many shareholders" over the past year when he "shifted his focus to politics," said CNN. While he had been "largely successful" in his effort to boost Republican candidates and causes, his political work "backfired on Tesla."
Company stakeholders have been "growing weary" of Musk's "forays into politics at the expense of their earnings," said The Daily Beast. Awarding the CEO this new tranche of shares is "thought to be an effort to ease this tension." And unlike his 2018 compensation package, currently in legal limbo, this new proposal "does not appear to be tied to goals like increasing the company's stock price," said TechCrunch. Tesla, whose stock is down approximately 25% this year, faces "strong headwinds, including strong competition from lower-cost Chinese rivals and declining brand loyalty," said the Times.
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Rafi Schwartz has worked as a politics writer at The Week since 2022, where he covers elections, Congress and the White House. He was previously a contributing writer with Mic focusing largely on politics, a senior writer with Splinter News, a staff writer for Fusion's news lab, and the managing editor of Heeb Magazine, a Jewish life and culture publication. Rafi's work has appeared in Rolling Stone, GOOD and The Forward, among others.
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