In its most brazen and controversial move thus far, Tesla has approved a colossal $29 billion stock grant to CEO Elon Musk, reaffirming its confidence in his vision in the face of ongoing hardships. The new Tesla Elon Musk stock award is designed to compensate Musk for what the company calls "transformative and unprecedented" growth, and to keep him on Tesla's evolving path.

The move is made since the electric car titan is confronted with gigantic headwinds — declining worldwide sales, increased competition, and a court fight over Musk's previous 2018 compensation package. That previous deal, then worth $56 billion, was recently nullified by a Delaware judge on governance concerns. Although Tesla is challenging that decision, the board characterized this new $29 billion award as a "first step" and a "good-faith" gesture.

Why Now?

Tesla emphasized that Musk has not been paid for years as a result of the lengthy court battle. In the meantime, Musk has publicly indicated a desire for more equity and control to be exclusively focused on Tesla, considering his increasing responsibilities at SpaceX, xAI, and Neuralink.

"Rewarding Elon for what he has achieved and is still achieving for Tesla is the appropriate thing to do," the company stated. Tesla also stated that since the 2018 compensation package was implemented, the market value of the company has risen by $735 billion.

The new Tesla Elon Musk stock award approved will increase Musk's stake to over 15%, up from 12.7%, making him the company's sole largest shareholder. For the board, it is less about rewarding past performance — it is a strategic measure to concentrate Musk's attention and leadership during times of crisis.

A Bet on Big Vision

Musk is also spearheading Tesla's evolution from being merely an EV manufacturer to an actual tech disruptor, and its goals include robotaxis, AI autonomy, and robots. The board clearly sees him as indispensable in guiding Tesla into its future.

The Elon Musk stock award at Tesla also sends a very public message to shareholders: despite controversies in the public eye, the company is firmly supporting its CEO.

But critics argue that this type of compensation is not justified, especially when Tesla is experiencing operational problems and declining sales in key markets like Europe and China.

Controversy and Control

Even Musk's visionary leadership remains divisive, dividing public and investor opinion. His highly visible political views and X (formerly Twitter) vocal presence have been linked to declining brand loyalty at Tesla, particularly among younger, more liberal buyers.

Even this, however, does not seem to deter the board from embracing the risks of Musk's public image. The endorsement of the Tesla Elon Musk stock award suggests that the firm is more interested in stability at the top than in not getting into trouble.

 Legal Problems Continue

It's interesting to observe here that this award isn't replacing the 2018 package, which was abrogated. Regulatory experts have cautioned that the new award may be challenged if it's perceived as yet another example of Musk bending the board to his will.

The court previously held that the board did not negotiate at arm's length under the 2018 agreement, which was an issue of board independence. Tesla contends that in this instance, the approval process was in accordance with good corporate governance.

What's Next for Musk and Tesla?

With this fresh package, Musk's wealth has gone up to approximately $350 billion, making him the richest individual in the world, according to Bloomberg. Tesla's woes are not yet over, though. The EV sector is slowing down in most of the world, supply chain tension persists, and technological innovation is a distant dream.

But the company is making yet another giant gamble on the man who founded it. For now, the Tesla Elon Musk stock award is a risk to bind the allegiance of a CEO with no shortage of other endeavors vying for his attention. The question is: Is this going to pay out to shareholders in the long run? Only time—and the next Tesla innovation—will tell.