In an 8-K filing with the US Securities & Exchange Commission (SEC) dated 3rd August 2025, Tesla (TSLA) revealed that it has awarded Elon Musk 96 million shares of the company as a new ‘Interim Pay Package’ because the ‘2018 CEO Performance Award‘ is at a halt by the Delaware court.
Entrepreneur Elon Musk is part of Tesla since it was a small, privately owned experimental electric vehicle company. From developing the first original Tesla Roadster to FSD and the Optimus humanoid robot, Musk has been at the helm of the company, leading it to a trillion-dollar market cap.
Yesterday, Tesla’s share price closed at $308.72 (NASDAQ: TSLA), which translates to a valuation of more than $29 billion for Elon Musk’s interim performance award. This award has earned Elon Musk the title of the highest paid CEO in history.
According to Tesla, this multi-billion-dollar package is awarded to Musk to retain him as the CEO of the company and lead the next phase of the growth through his vision for the future. The following statement in the 8-K filing summarizes the approval of Elon Musk’s 2025 Interim Award of $29 billion:
On August 3, 2025, the Company approved an award of 96 million shares of restricted stock (the “2025 CEO Interim Award”) to Mr. Musk under the Company’s 2019 Equity Incentive Plan (the “2019 Plan”). The shares underlying the 2025 CEO Interim Award will be issued upon termination or expiration of the waiting period or periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”). The 2025 CEO Interim Award was recommended by the Special Committee on August 1, 2025, and approved by the Board, with Mr. Musk and Kimbal Musk recusing, on August 3, 2025.
Source: Tesla Investor Relations / SEC (PDF below).
With the advent of AI, Tesla is not just a car company anymore. To survive and thrive in the age of artificial intelligence and self-driving cars, the leadership at Tesla thinks that it’s critical to have Elon Musk as the CEO.
In its disclosure to the SEC, Tesla’s board of directors has made it clear that Musk is indispensable to the company. It’s Elon Musk’s visionary leadership that has led Tesla to become a leader in electric vehicle manufacturing and the self-driving cars industry today.
In the process, Tesla is also transitioning its mission from “To accelerate the world’s transport to sustainable energy” to “To advance humanity through artificial intelligence, robotics, and sustainable technology”.
Highlighting this critical point in the 8-K filing document, Tesla wrote for its investors and 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 towards becoming a leader in AI, robotics and related services. To succeed, it requires a leader who combines strategic foresight, adaptability, and relentless execution to outperform competition and inspire the team. Elon has demonstrated these unmatched leadership abilities time and time again with his unparalleled track record of delivering shareholder value since he joined as a founding figure and spearheaded the transformation of our extraordinary company.
Delaware Court and Provisions
Elon Musk’s 2018 CEO Performance Award was blocked by the Delaware court. The final verdict on this case is still pending.
The majority of retail Tesla shareholders are in favor of Elon Musk’s 2018 Performance Pay Package. However, some investors and stakeholders do not agree with the decision of Tesla’s board of directors.
According to the valuation of the Tesla shares awarded in the 2018 Award, the $29 billion awarded to Musk in the 2025 Interim Pay Package is just about one-third of the previous package.
If the court fully reinstates the 2018 Performance Award, Elon Musk would get around an astronomical $90 billion.
The interim award provides the following provisions:
- 96 million restricted shares of stock, subject to Elon paying a purchase price upon meeting a two-year vesting term, to be delivered after receipt of antitrust regulatory approval;
- The purchase price will be equal to the split-adjusted exercise price of the stock options awarded to Elon under the 2018 CEO Performance Award ($23.34 per share);
- A requirement that Elon serve continuously in a senior leadership role at Tesla during the two-year vesting term;
- A pledging allowance to cover tax payments or the purchase price;
- A mandatory holding period of five years from the grant date, except to cover tax payments or the purchase price (with any sales for such purposes to be conducted through an orderly disposition in coordination with Tesla); and
- If the Delaware courts fully reinstate the 2018 CEO Performance Award, this interim award will be forfeited or returned or a portion of the 2018 CEO Performance Award will be forfeited. To put it simply, there cannot be any “double dip.” Elon will not be able to keep this new award in addition to the options he will be awarded under the 2018 CEO Performance Award should the courts rule in our favor.
Message from the Special Committtee on Elon Musk’s Tesla Interim Award
The Special Committee, consisting of the two of us, was formed earlier this year to consider how best to retain and incentivize Elon in a manner that aligned with the best interests of the Company. The Special Committee and the Board deliberated carefully over the decision to grant this interim award against the backdrop of the ever-intensifying AI talent war and Tesla’s position at a critical inflection point. We believe it directly addresses a top concern and priority for shareholders and the Board alike: energizing and focusing Elon on Tesla so he can propel Tesla into its next era of growth, while we continue the legal campaign to have the 2018 CEO Performance Award reinstated. This interim award is structured to incrementally increase his voting rights upon grant, which he has repeatedly told us—and shareholders have confirmed—is an important part of incentivizing him to stay focused on the critical work we are doing here at Tesla. We believe this is a vital consideration, and we used the tools currently available to us—our existing equity incentive plan—to grant this award.
We would also like to stress that prior to recommending this award, we reviewed your letters, read your X posts, and considered the direct feedback we have received from many of you in order to align our recommendation with your expressed views. From those communications, we know that one of your top concerns is keeping Elon’s energies focused on Tesla. This award is a critical first step toward achieving that goal, although it is limited by the
capacity of our current equity incentive plan. As such, we are also working on next steps to address that issue. Still, while our work remains ongoing, we feel it is important to communicate directly and transparently with you all, our shareholders and Tesla’s owners. The Special Committee continues our work to address a longer-term CEO compensation strategy, which we plan to put to a shareholder vote at the November 6 annual meeting.Thank you for your continued support of Tesla and stay tuned for more information as we get closer to our shareholder meeting.
Very truly yours,
Robyn Denholm & Kathleen Wilson-Thompson
Members of the Special Committee of the Board of Directors
Elon Musk Interim Award 8-K Document (PDF)
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