Elon Musk retains the title as the best paid CEO in history with $ 26 billion in remuneration – and the only thing he has to do is present for two years

“It is imperative to keep and motivate our extraordinary talent, starting with Elon,” wrote the chairman of the board of directors of Tesla, Robyn Denholm and his other director Kathleen Wilson-Thompson in a letter to the shareholders. “The war for AI talents is intensifying, with the last months, including the acquisitions of several billion dollars of companies and the nine -digit cash payments for individual individual engineers.”

Even in this selected group, “no one corresponds”, the members of the board of directors wrote. Thus, the price of almost $ 30 billion is essential to keep Musk concentrated on Tesla – and make him recruit new talents to keep the manufacturer of competitive electric vehicles in AI, robotics and robotaxis, according to the board of directors. Unlike the previous Musk’s previous remuneration plan, which included important obstacles to the value of the shareholders he had to overcome, all that Musk must do to collect the new price has remained with Tesla as CEO or in a higher executive role for the next two years. He must also hold the action until 2030, under the terms of the sentence, which will increase his participation by around 13% to 15%.

Brian Dunn, a 40 -year -old practitioner in remuneration and director of the Institute for Cornell University Remuneration studies said Fortune The new Musk Prize is like what some experts have called “fog subsidies.”

“If you are there and you have enough breath in you to brake the mirror, you get them,” said Dunn. “These have no performance targets.”

Technically, the allocation will be made in limited shares, but Musk must pay $ 23.34 per share to have the action – the same exercise price as its 2018 options. With the Tesla actions trade at more than $ 300 per share, the arrangement gives Musk around $ 280 per integrated value share, which some Compecies of the COM have called “options at reduced prices”.

Larry Cunningham, director of the Weinberg Center for Corporate Governance of the University of Delaware, said that, whatever the way the price could be classified for accounting or tax purposes, there is a simple and precise description.

“A subsidy of option to buy deep actions, allocated only for retention,” said Cunningham Fortune in a declaration.

Musk’s remuneration package has a 26 billion dollars floor

The new package creates what FAR advisers, Eric Hoffmann, described as an “ceiling and ceiling” arrangement directly bound at the end of the current dispute in Delaware, which Tesla called. If the courts again erases its original award of 303 million share purchase options, Musk can keep the new shares of 96 million, worth around 29 billion dollars during the current share. But if part of the initial subsidy is reintegrated, the new prize will be narrowed accordingly, said Hoffmann.

“There is a clause that says” no double soaking, “he said. “But this scholarship of 96 million action could be used to compensate for one of the initial subsidies if it loses during legal action.”

Hoffmann said that the Tesla board of directors is “unprecedented” in the remuneration of managers.

“There is no game book for that,” said Hoffmann, who analyzed the terms of the prize. “They made the first subsidy, he was canceled by a judge, they made another subsidy, approved it by the shareholders, then it was selected.”

At Set level, a shareholder challenge on the 2018 Musk remuneration package led to a historic opinion in which Musk’s salary was canceled. The board of directors of Tesla then returned the remuneration plan to the shareholders in 2024 for an approval of speeches voting, and the shareholders voted in favor of giving Musk the comp. Last December, the same judge – the Chancellor of the Kathaleen McCormick – deadlines was recorded to cancel her previous decision, which Tesla has since appealed.

In their letter to investors, the board of directors wrote that the court does not exist when the court governs again and described this price as a “first step, a payment in good faith” in Elon “.

However, Tesla’s performance in 2025 is far from 2018, when the board of directors awarded Musk its daring subsidy of Moshot. He followed the price by multiplying the value 12 of Tesla. Its market capitalization exceeded $ 1 billion in October 2021 and again in May 2025. But recently, Tesla was struggling. The start of the year, its share price is down more than 18% and Musk was politically active, supporting President Donald Trump despite affiliation that deactivates the Tesla climate -focused consumer base, in particular in California.

And this time, the board of directors left little chance. Tesla has erected an important legal barrier in May which makes a challenge at this price much more difficult to do.

After McCormick’s decision, Tesla shareholders approved the move to Delaware in Texas. In May, Texas changed its commercial code and Tesla modified its statutes a day later. The amendment of regulations has created a new threshold so that any shareholder who wishes to contest Musk’s salary before the court must hold at least 3% of Tesla’s shares. The value is worth more than $ 3 billion.

“The Central Theme Here is that tesla has moved its jurisdiction of incorporation from Delaware to Texas and as a result the owner of tesla’s actions and musk’s compensation will have to be judged under texas law, which is more permissive,” Wrote Columbia Law Professor John Coffee Fortune. “Tesla can be continued, but the chances are more in his favor in Texas.”

Texas followed Tesla’s decision by undertaking a campaign to make it a first commercial state. At this point, we do not know how the Tenas of Texas would tackle a challenge.

“It will be interesting to see if a Texas court chooses to follow the analytical framework of Delaware – or rather refuses to engage in a similar judicial examination,” said Cunningham. “The result could influence the way other companies weigh the relative merits of Delaware against Texas as a business center.”

Investors react to the composition of Musk

Tesla has a real army of committed individual retail investors, and many supporters in Musk and have voted in favor of her compat plan twice now, doing so on the line with more than a majority support.

However, some retirement fund managers supervise retirees invested in Tesla’s shares have been less than delighted with the new Musk prize.

“A set of remuneration of $ 29 billion for any CEO, not to mention the one who has been largely absent from his daily responsibilities, because sales and stock value continues not to be obscene expectations,” said the New York Brad controller in a statement.

Lander said that Tesla’s board of directors enriches musk at the expense of investors, “again”.

The treasurer of the state of Illinois, Michael Rriprichs, said Fortune A compound package of $ 29 billion is “blatant face”.

“But in the light of Elon Musk’s inattention to Tesla’s daily needs, and the worse market value of the company, the package suggests a board of directors with their responsibilities for investors,” said Rries in a press release. “Revenues are not expectations, the Council should be less concerned with the payment of loyalty to a gourmet CEO than by the long -term planning of the success of the company. Shareholders should require better corporate governance. ”

Soc Investment Group, who represented a group of investors with nearly 8 million shares invested in Tesla, said Fortune In a statement that today’s announcement included a striking admission to the board of directors. “Even additional additional capital of $ 24 billion may not motivate Elon Musk to stay two more years, not to mention that he spends enough time and attention to transform the currently collapsed sales,” Soc.