Tesla withdraws $29B Musk award after Delaware court reinstates larger package

Tesla has officially canceled the $29 billion interim compensation package it awarded to CEO Elon Musk last year, following a recent decision by the Delaware Supreme Court that reinstated his original $56 billion award from 2018. The move aligns with Tesla’s earlier promise to avoid any “double dip” scenario.

The interim package was introduced in August 2025 as a safeguard in case Delaware’s highest court rejected Musk’s appeal. At the time, Tesla assured investors that the interim award would be nullified if Musk’s appeal succeeded. “[T]here cannot be any ‘double dip’,” the company stated last year.

On Thursday morning, Tesla confirmed in its quarterly filing with the Securities and Exchange Commission that it voided the interim package on April 21. The board voted on the decision without Musk or his brother, Kimbal Musk, who also serves as a director. “These actions are consistent with the ‘no double dip’ principle, which precludes Mr. Musk from getting a windfall in the event that he may exercise the 2018 CEO Performance Award,” Tesla wrote in the filing.

The $56 billion package, originally granted in 2018, faced a legal challenge from a shareholder who argued that Musk had essentially negotiated against himself and failed to fully inform shareholders. After years of litigation in Delaware’s Chancery Court, a judge ruled in 2024 that the shareholder was correct, striking down the pay deal.

Tesla launched a public relations campaign while appealing that ruling to the state’s supreme court. This included a “re-vote” on the package to demonstrate that shareholders were not misled. Meanwhile, Musk threatened to leave Tesla to develop artificial intelligence elsewhere, prompting the board to craft the $29 billion interim award and begin work on a far larger compensation package worth up to $1 trillion.

The revocation of the interim award does not affect Musk’s potential $1 trillion package. To unlock that full amount, Musk must lead Tesla through a series of operational milestones, including delivering 20 million vehicles, deploying one million robots, and putting one million robotaxis on the road. He also needs to increase Tesla’s valuation to over $8 trillion within a decade.

Interestingly, Tesla’s quarterly filing reveals that the company is now making its own estimates about which milestones Musk might or might not achieve. While it does not specify which ones are likely, Tesla noted it has “unrecognized stock-based compensation expense of $9.97 billion for the operational milestone that was considered probable of achievement over the term of the award.” For milestones deemed “not probable of achievement,” the company reported unrecognized stock-based compensation expenses ranging from $105.82 billion to $120.37 billion.

Though Musk has 10 years to meet all the goals tied to the trillion-dollar package, many of these milestones are scaled-back versions of promises he has made before. Still, Tesla itself appears uncertain about his ability to deliver on at least some of them.

In addition, Tesla’s board has implemented restrictions on how and when Musk can sell shares from the reinstated 2018 package. The goal is “to mitigate any negative impact of significant share sales on the Company.” These restrictions mirror some of the broader rules in the $1 trillion package. They require Musk to remain CEO or a product development executive through at least 2028 for the shares to vest, and mandate that he hold the shares for five years after vesting.