Introduction: A Payout for the Ages

In a move both lauded by Tesla loyalists and sharply criticized by corporate governance watchdogs, Tesla’s board has formally re-approved a massive compensation package for CEO Elon Musk: an award of 96 million Tesla shares, valued at over $55 billion at current prices.

Originally approved in 2018 and invalidated by a Delaware judge in early 2024, the package was resubmitted for a shareholder vote and—despite controversy—won approval in June 2025. But behind the headlines lies a deeper story: one of legal challenges, governance risks, and the increasing entanglement between Elon Musk’s public persona and Tesla’s financial future.

 The Origin of the Package: 2018’s Bold Bet

Tesla’s 2018 pay plan for Musk was unprecedented: a zero salary deal that tied his compensation strictly to performance. The terms were aggressive. If Musk increased Tesla’s market capitalization from $50 billion to $650 billion and hit 12 financial and operational targets, he’d unlock tranches of stock awards totaling roughly >12% of Tesla’s shares—now amounting to 96 million shares after stock splits.

The board framed it as a moonshot deal”, incentivizing Musk to build an empire without guaranteed payouts. But critics argued from the start that the targets were crafted in ways Musk could influence and lacked proper board oversight.

 Delaware Court Steps In: A Landmark Rejection

In January 2024, Delaware Chancery Court Judge Kathaleen McCormick stunned the corporate world by ruling that the pay package was “unfair” and must be rescinded. Her 201-page opinion emphasized:

Musk’s outsized influence over Tesla’s board

“>Lack of proper negotiation or independent review of the 2018 deal

Conflicts of interest, as multiple board members had personal or financial ties to Musk

Opaque disclosures to shareholders about the approval process

McCormick concluded that Tesla’s board had failed its fiduciary duty, and ordered the shares voided—sparking a legal and financial firestorm.

Following the court’s decision, Musk launched a campaign to reincorporate Tesla in Texas, portraying Delaware as hostile to innovation. In a March 2025 special vote, over 84% of participating shareholders approved the move to Texas.

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Tesla’s board then announced it would resubmit the same pay plan for a new vote under Texas corporate law. Critics slammed the move as forum shopping; Musk supporters called it shareholder democracy.

In June 2025, Tesla shareholders voted again—and passed the plan with a roughly 72% majority (excluding Musk’s own votes). The company immediately reissued the 96 million shares into Musk’s control.

 Who Owns Tesla? A Wealth Concentration Deep Dive

With this grant, Elon Musk once again holds over 20% of Tesla’s outstanding shares, consolidating personal wealth exceeding $200 billion. For perspective:

Musk’s net worth now exceeds the GDP of more than 120 countries.

The share award is larger than the entire annual profits of Apple, Microsoft, or Google.

Tesla has committed more stock to one individual than many S&P 500 companies have in total shareholder equity.

Critics question whether one person should control so much of a company that influences global energy, transportation, and AI development.

Corporate Governance Experts Raise Red Flags

A coalition of institutional investors—including CalPERS, Norway’s sovereign wealth fund, and multiple pension boards—opposed the package, citing:

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Lack of accountability for missed milestones (e.g. delays on Cybertruck, FSD failures)

Excessive CEO power, bordering on autocracy

Insufficient board independence, with members like James Murdoch and Kimbal Musk (Elon’s brother) retaining influence despite conflicts

Nell Minow, a leading corporate governance critic, warned:

This is not a compensation plan. It’s a coronation.”

Tesla’s Counterargument: He Earned It

Tesla’s board, led by Chair Robyn Denholm, argued that Musk’s leadership created over $1 trillion in shareholder value since 2018, even with recent volatility. They stressed:

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Tesla hit >11 of 12 performance milestones by early 2023

Revenue grew from $21 billion (2018) to over $130 billion (2024)

Stock price soared from $70 (adjusted) to over $650 at peak before correcting to ~$580 in 2025

Musk declined any cash compensation or RSUs not tied to performance

>Tesla’s investor relations team also noted that most of the gain is unrealized and taxable only if Musk sells.

The Bigger Picture: Power and Distraction Risks

Musk’s leadership at Tesla has always been controversial. While he’s credited with pushing EVs into the mainstream, recent years brought erratic behavior:

Cybertruck rollout issues, with recalls and fire risks

FSD (Full Self Driving) failures and litigation over misrepresentation

Increasing time spent on X (formerly Twitter), Neuralink, and xAI

Political tweets and lawsuits that alienate both consumers and regulators

Many investors now question whether the massive share award incentivizes Musk to remain engaged at Tesla—or merely rewards him regardless of focus.

 Legal Uncertainty Isn’t Over

Though the Texas vote granted new approval, legal experts say Delaware may still weigh in. If theDelaware Supreme Court upholds Judge McCormick’s ruling, Tesla’s reissuance of the award could trigger a new wave of lawsuits, especially from investors in Delaware-based mutual funds or pensions.

Furthermore, the SEC is reviewing disclosures related to the reincorporation vote and whether Musk used undue influence via his social media platforms to sway shareholder sentiment.

Public Backlash Mounts Amid Inequality Debate

With the U.S. mired in affordability crises—from housing to healthcare—Musk’s share award drew public ire. Social media exploded with criticism:

“One man gets $55 billion while we can’t afford rent or insulin.Tesla built by thousands of engineers… yet only Musk gets the reward.”“This is why billionaires shouldn’t run companies alone.”

Labor organizers also questioned why Tesla continues to oppose unionization at its factories, especially in Texas and California, even as its CEO amasses unprecedented personal wealth.

 What’s Next for Tesla—and for Musk?

As Tesla enters its next phase—developing the Model 2 compact EV, expanding battery production, and deploying Robotaxis—the question looms: Can Elon Musk still lead?

If he succeeds, the share award may be remembered as a bold bet on genius.

If he falters, it could go down as the most costly mistake in corporate governance history.

Tesla’s board has said it willtie future equity grants to stricter oversight, but critics remain skeptical.

Conclusion: A Reckoning in Silicon Valley

The re-approval of Elon Musk’s 96 million-share award is more than a headline—it’s a referendum on how corporate America rewards power, risk, and spectacle. Supporters say Musk deserves it. Detractors call it legalized looting.

As regulators, courts, and shareholders digest the implications, one truth is clear: Tesla is now more than ever a one-man company, for better or worse.

The only question left is: what happens if that one man walks away—or goes too far?