Tesla just gave Elon Musk a $29,000,000,000 bonus despite the company's plummeting stock.
Since peaking in December 2024, Tesla shares have tumbled 38% – a slide that coincides with growing customer backlash over Musk's active political campaigning for Donald Trump.
With the Trump endorsement and fears that the company has turned into a political symbol, Elon Musk's actions appear to have cost Tesla dearly.
A survey from S&P Global Mobility reveals that while 73% of Tesla owners stuck with the brand when buying their next car in June 2024, that number dropped to just under 49.9% by March.
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While loyalty has recovered slightly to 57.4% by May, it's still a far cry from the brand devotion Tesla once enjoyed among its largely left-leaning buyers.
In response to their rocky ride, Tesla's board has now approved a massive $29 billion (£22 billion) share award for Musk.
Back in 2018, Tesla agreed to a 10-year pay package for Musk worth $56 billion. However, a Delaware judge rescinded this deal in 2024, ruling against the massive payout.
Now Tesla's board is essentially trying to honour that original 2018 agreement through this new award. The South African will pay $2 billion to buy 96 million shares at the same price agreed in the original 2018 deal.
In a shareholder letter, Tesla board members Robyn Denholm and Kathleen Wilson-Thompson explained their reasoning that 'a deal is a deal.' The award of 'good faith' remains in legal limbo, awaiting a court date for an appeal.
“To recognise what Elon has accomplished and the extraordinary value he delivered to Tesla and our shareholders, we believe we must take action to honour the bargain that was struck in 2018,” the directors wrote.
Denholm and Wilson-Thompson said they had reviewed posts by investors on X and acknowledged concerns about his divided attention.
Along with running Tesla, the tech mogul also owns SpaceX, X (formerly Twitter), the AI company xAI, and the brain implant business Neuralink. His recent whereabouts at the White House have only heightened consumer worries about where his focus truly lies.
“From those communications, we know that one of your top concerns is keeping Elon’s energies focused on Tesla,” they wrote. “This award is a critical first step toward achieving that goal.”
This $29 billion award puts Musk's wealth at around $350 billion, according to the Bloomberg Billionaires Index, maintaining his position as the world's richest person.
Dan Ives, an analyst from Wedbush Securities and a backer of Musk, said the award could actually help Tesla's share price as 'Musk remains Tesla’s big asset.'