Tesla’s Billion-Dollar Bet: Retaining Elon Musk Amid New Challenges

Tesla has made a strategic move to retain CEO Elon Musk during a pivotal transition from its struggling core auto business to robotaxis and humanoid robots. The company awarded Musk shares valued at $29 billion in a bid to keep him at the helm after his 2018 pay package was struck down by a Delaware court last year.

Musk will be eligible for the new shares if he remains in a top executive role for two more years, while the company prepares to vote on a new long-term compensation plan at the upcoming annual investor meeting. Tesla's directors clearly still regard Musk as the best choice to address the company's mounting challenges, even as his political involvement raises concerns.

Despite recent setbacks, Tesla's board views Musk's leadership as essential to the company's survival. Investors reacted positively to the news, sending Tesla shares up by nearly 2% in early trading. Musk's commitment to Tesla remains critical, amid falling sales, increased competition, and political controversies affecting brand loyalty.

(With inputs from agencies.)