In a move praised by Tesla supporters and sharply criticized by corporate governance watchdogs, Tesla’s board has formally reinstated a massive compensation package for CEO Elon Musk: an award of 96 million Tesla shares, valued at more than $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 – approval in June 2025. But behind the headlines lies a deeper story: one of legal challenges, governance risks and the growing rift between Musk and the company.

The Origin of the Pack: 2018’s Bold Bet

Musk’s 2018 Tesla pay plan was unprecedented: a zero-salary agreement 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 achieved 12 financial and operational goals, he would unlock portions of stock awards totaling approximately >12% of Tesla’s stock—now totaling 96 million shares.

The board framed it as a “money-spinning” deal, encouraging Musk to build an empire without guaranteed payouts. But critics argued from the start that the targets were created in ways Musk could influence and lacked adequate board oversight.

The Delaware Court Enters: A Landmark Rejection

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of the Delaware Court of Chancery stunned the corporate world by ruling that the pay package was “unjust” and should be rescinded.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

Musk’s Exaggerated Influence on Tesla’s Management

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

Conflicts of interest, as several 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 in its fiduciary duty and ordered the shares void—setting off a legal and financial firestorm.

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

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

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

Who Owns Tesla? A Deep Dive into Wealth Concentration

With this concession, Elon Musk once again holds more than 20% of Tesla’s outstanding shares, cementing his personal wealth to over $200 billion. For perspective:

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

The stock premium is greater than the entire annual profit of Apple, Microsoft or Google.

Tesla has committed more shares to one individual than many S&P 500 companies have in total shareholders.

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, the Norwegian Sovereign Wealth Fund and several pension boards – opposed the package, citing:

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

Excessive CEO power, bordering on autocracy

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

Nell Minow, a leading critic of corporate governance, warned:

This isn’t a compensation plan. It’s a coronation.

Tesla’s counterargument: He won

Tesla’s board, led by Chairwoman Robyn Denholm, argued that Musk’s leadership has created more than $1 trillion in shareholder value since 2018, even with recent volatility. They emphasized:

> Tesla hit > 11 of 12 performance milestones in early 2023

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

The stock price rose from $70 (adjusted) to over $650 at the peak before correcting to ~$580 in 2025

Musk declined any cash compensation or non-performance-linked RSUs.

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

The Big Picture: Power and Distraction Risks

Musk’s leadership at Tesla has always been controversial. While he is credited with pushing EVs in recent years, it has also brought with it irregular behavior:

Cybertruck launch issues, with recalls and fire risks

FSD (Complete Self-Driving Failures) and Misrepresentation Litigation

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

Tweets and political processes that alienate consumers and regulators

Many investors now question whether the massive stock premium incentivizes Musk to stay involved in Tesla—or simply rewards him regardless of focus.

Legal uncertainty is not over

Although the Texas vote granted a new ruling, legal experts say Delaware could still weigh in. If the Texas Supreme Court upholds Judge McCormick’s ruling, the reinstating of Tesla’s award could trigger a new wave of lawsuits, especially from mutual fund investors and Delawareans.

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

Public reaction blueprint amid debate on inequalities

With the U.S. mired in affordability crises—from housing to healthcare—MUSK’s participation award drew IRE public attention. Social media exploded with criticism:

“A man gets $55 billion while we can’t afford rent or insulin.

Labor organizers also questioned why Tesla continues to oppose unionization at its factories, especially in Texas and California, even as its CEO amassed 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 successful, the stock award could be remembered as a bold bet on Genius.

If he falters, it could be the most costly mistake in the history of corporate governance.

Tesla’s board has said it will make future capital allowances subject 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 enterprise 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-person company, for better or worse.

The only question that remains is: what happens if this man walks away – or goes too far?