Elon Musk Awarded Tesla Shares Worth $29 Billion Dollars Amid Shareholder Battle and Ongoing Court Dispute

Elon Musk is set to receive Tesla shares valued at $29 billion as the electric vehicle manufacturer seeks to ensure the loyalty of its chief executive following the blockage of his earlier multibillion-dollar remuneration by a Delaware court. The Tesla board, guided by a special committee led by chairwoman Robyn Denholm and director Kathleen Wilson-Thompson, has agreed to grant Musk 96 million restricted shares in an effort to boost his voting rights incrementally. Both Musk and Tesla shareholders have underlined the necessity of this measure to maintain his commitment to the company.

In correspondence to shareholders, the committee emphasised their confidence that the interim award would keep Musk engaged in steering the company and enhancing its value. The letter noted the breadth of Musk’s responsibilities and expressed confidence that the share award would motivate him to be actively involved in Tesla and attract top talent.

Earlier in the year, Tesla’s board appointed the special committee to examine Musk’s compensation after a Delaware judge declined to reinstate his historic $56 billion pay package, despite a favourable shareholder vote. The ruling followed a legal challenge from shareholder Richard Tornetta, who objected to the 2018 compensation deal, which was judged as excessive. Tesla continues to appeal the decision, but the protracted litigation prevents Musk from accessing shares he would have received under the 2018 award.

Tesla is navigating a challenging environment, facing slowing sales as competition intensifies from Chinese firms and established carmakers expanding their presence in electric vehicles. Reduced American government support for electric vehicles has compounded the firm’s difficulties, following discord between Musk and governmental authorities. Tesla shares rallied after the US election, but have since declined over 20 per cent since the beginning of the year.

Musk has been repositioning the firm’s public image, shifting from automobiles to artificial intelligence and robotics by focusing on initiatives like robotaxis and humanoid robots. Under the present arrangement, Musk is required to pay $23.34 per restricted share that vests, mirroring the exercise price of the original 2018 award. Receipt of the interim shares is conditional upon Musk remaining in a principal executive role until 2027, and shares are subject to a five-year holding period, except for covering tax obligations or the purchase price.

The interim award may be nullified if a final, unappealable court judgement allows Musk to utilise his 2018 options, ensuring there is no opportunity for dual claims. Tesla shares increased by £6.63 or 2.2 per cent, ending the day at £309.26 in New York, providing the company a market capitalisation of nearly $1 trillion.