Elon Musk was awarded a new $29 billion pay package by Tesla’s board on Monday that vests in two years — a vital move to keep the mogul at the helm during a crucial pivot from its struggling core auto business to robotaxis and humanoid robots.

The deal, announced in an SEC filing, grants Musk 96 million new shares in Tesla, which has been in a prolonged sales slump that has hurt the company’s stock performance this year.

Shares were up 2% in mid-day trading.

Tesla’s special committee approved a new pay package for Elon Musk.REUTERS
“While we recognize Elon’s business ventures, interests and other potential demands on his time and attention are extensive and wide-ranging … we are confident that this award will incentivize Elon to remain at Tesla,” members of a special committee formed to consider Musk’s pay said in the filing.

Last year, a Delaware judge nixed Musk’s original stock-based compensation package, which was worth more than $50 billion, after finding it was too excessive and unfair to shareholders. Musk was so incensed by the decision that he moved Tesla’s state of incorporation from Delaware to Texas.

Musk, who is already the world’s richest person with a real-time net worth of $398 billion according to Bloomberg, filed an appeal in March challenging the Delaware judge’s ruling.

Tesla’s special committee said there would be no “double dip” if the original deal is eventually restored. Instead, the $29 billion package will either be voided or offset.

The special committee consists of just two members – Tesla chair Robyn Denholm and board director Kathleen Wilson-Thompson.

Musk is already Tesla’s largest individual shareholder and owns roughly 13% of the company.

The announcement removed a key “overhang” on Tesla’s shares and should help calm investors with questions about Musk’s commitment, according to Wedbush analyst Dan Ives.

“Musk remains Tesla’s big asset and this comp issue has been a constant concern of shareholders once the Delaware soap opera began,” Ives wrote in a note to clients.

Ives added that it is critical for Tesla’s board to “get this long-term compensation strategy in place prior to the company’s November 6th shareholder meeting which would address the elephant in the room.”

According to the deal’s terms, Musk’s new shares will only vest if he remains a key executive at Tesla through at least 2027. The shares also come with a five-year lockup, with Musk only able to sell to cover tax payments.

Critics have long alleged that Musk is overpaid compared to other Big Tech CEOs, such as Microsoft’s Satya Nadella and Google’s Sundar Pichai, who have led their companies to share price growth without monster pay packages.

Just a few executives have secured deals worth $1 billion or more annually in recent years, according to the Wall Street Journal.

That includes Palantir boss Alexander Karp, who earned more than $6 billion last year, and Hock Tan of chip maker Broadcom, who earned $1.15 billion.

Musk will need to redouble efforts to lead a turnaround at Tesla. Analysts have pointed to Tesla’s aging car lineup and increased competition from Chinese automakers like BYD as key obstacles for the company.

Musk’s political adventures, including his work with the Department of Government Efficiency and public clashes with President Trump, have also worried stockholders.

The Tesla CEO has cited AI initiatives, such as Tesla’s self-driving Robotaxis and Optimus humanoid robots, as central to its long-term business strategy.