Tesla awards CEO Musk millions of shares valued at about $29 billion

(AP) — Tesla gave Elon Musk a stock grant of $29 billion on Monday as a reward for years of “transformative and unprecedented” growth despite a recent foray into right-wing politics that has hurt its sales, profits and its stock price.

In giving its billionaire CEO 96 million in restricted shares, the electric car company noted that Musk hasn’t been paid in years because his 2018 compensation package has been rejected by a Delaware court. The award comes eight months after a judge revoked the 2018 pay package a second time. Tesla has appealed the ruling.

Tesla on Monday called the grant a “first step, good faith” way of retaining Musk and keeping him focused, citing his leadership of SpaceX, xAI and other companies. Musk said recently that he needed more shares and control so he couldn’t be ousted by shareholder activists.

“Rewarding Elon for what he has done and continues to do for Tesla is the right thing to do,” the company said in a regulatory filing, citing an increase of $735 billion in Tesla’s value on the stock market since 2018.

Tesla shares have plunged 25% this year largely due to blowback over Musk’s affiliation with President Donald Trump. But Tesla also faces intensifying competition from both the big Detroit automakers, and from China.

In its most recent quarter, Tesla reported that quarterly profits plunged from $1.39 billion to $409 million. Revenue also fell and the company fell short of even the lowered expectations on Wall Street.

Investors have grown increasingly worried about the trajectory of the company after Musk had spent so much time in Washington this year, becoming one of the most prominent officials in the Trump administration in its bid to slash the size of the U.S. government.

The electric vehicle maker said in the regulatory filing that Musk must first pay Tesla $23.34 per share of restricted stock that vests, which is equal to the exercise price per share of the 2018 pay package.

In December Delaware Chancellor Kathleen St. Jude McCormick reaffirmed her earlier ruling that Tesla must revoke Musk’s multibillion-dollar pay package. She found that Musk engineered the landmark pay package in sham negotiations with directors who were not independent.