Hey Tesla fans, ever worry Musk’s side hustles are derailing EVs? The company’s $29B “good faith” grant aims to fix that, per fresh board docs.

Tesla awarded CEO Elon Musk 96 million shares valued at approximately $29 billion on Monday, positioning the move as a “good faith” effort to retain him while his 2018 compensation package remains in legal limbo. This development comes as the electric vehicle giant navigates declining sales and a strategic pivot toward artificial intelligence and robotics. According to the company’s SEC filing, the award vests after two years of service in a senior role.

Key Terms of the Stock Grant

The board approved the grant without tying it to specific performance metrics, differing from typical executive compensation structures that often link pay to goals like revenue growth or market share gains. Musk must remain in a leadership position for two years to access the shares, and he will pay $23.34 per share upon vesting—the same exercise price as his disputed 2018 award, reports Le NY Times. If courts reinstate the original package, valued at about $85 billion at current prices, Tesla assures no “double dip” occurs, with provisions to forfeit or adjust the new shares accordingly.

This setup reflects Tesla’s recent relocation of its corporate domicile to Texas from Delaware, where a judge invalidated the 2018 plan for inadequate shareholder disclosure and board independence. CNBC reports that the company appeals the ruling, arguing a subsequent shareholder vote should validate it.

Shift in Focus from EVs to Emerging Technologies

Tesla redirects resources toward autonomous robotaxis and humanoid robots, technologies that promise future revenue but currently contribute little. Car sales dropped this spring, and quarterly earnings have not risen since the third quarter of 2024. Board members Robyn Denholm and Kathleen Wilson-Thompson emphasized the transition in their letter to shareholders:

“Through Elon’s unique vision and leadership, Tesla is transitioning from its role as a leader in the electric vehicle and renewable energy industries to grow toward becoming a leader in A.I., robotics and related services.”

This shift raises questions about Tesla’s core EV business, where it holds a market value near $1 trillion despite a 20% stock decline this year. The company loses market share partly due to Musk’s political activities, which have distanced some liberal buyers— a key demographic for electric vehicles. Musk, already holding a 13% stake and worth $350 billion per Bloomberg, expressed concerns about activist shareholders ousting him. He told analysts last month:

“I think my control over Tesla should be enough to ensure that it goes in a good direction, but not so much control that I can’t be thrown out if I go crazy.”

Reactions from Analysts and Shareholders

Analysts view the award as essential for stability. Daniel Ives of Wedbush described it as “a strategic move by the board to solidify Musk as C.E.O. of Tesla over the coming years,” calling him the company’s “top asset” and retention a “must.” Yahoo Finance notes that many shareholders support Musk’s vision, prioritizing his focus on Tesla amid his ventures in rockets, AI, and brain implants.

The letter to shareholders acknowledged investor priorities: “We know that one of your top concerns is keeping Elon’s energies focused on Tesla,” adding that the award serves as “a critical first step toward achieving that goal.”

Critics, however, question the board’s independence, given members include Musk’s brother and friends, potentially weakening oversight.

For EV enthusiasts, this package ensures continuity in innovation, like advanced battery tech and autonomous driving features that enhance vehicle efficiency and range—often exceeding 300 miles (483 kilometers) per charge in models like the Cybertruck. Yet, it highlights risks: diverted attention could slow EV advancements, impacting operational costs for owners facing higher competition from rivals. Tesla’s stock recovered from a 50% drop between December and April, signaling market confidence in Musk’s leadership despite profit slumps.

Overall, the award underscores Tesla’s bet on Musk to steer through EV market pressures while exploring AI-driven growth, balancing short-term sales dips with long-term potential.