Tesla drops Musk’s $29B ‘interim’ award after Delaware court restored larger pay package

Source: TechCrunch

Tesla has revoked the “interim” pay package worth $29 billion that it gave its CEO Elon Musk last year, after the Delaware Supreme Court recently restored his larger $56 billion compensation award from 2018.

The company had given Musk the interim package in August 2025 to hedge against the possibility of Delaware’s highest court rejecting his appeal. Tesla explained to investors that the interim package would be voided should Musk prevail. “There cannot be any ‘double dip’,” the company wrote last year.

Revocation of the interim award

Tesla confirmed in its quarterly filing with the Securities and Exchange Commission on Thursday morning that it spiked the interim award on April 21. The board voted without Musk or his brother (and fellow director) Kimbal Musk.

“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.

Background on the 2018 package

Tesla granted the $56 billion package to Musk in 2018. A shareholder sued, alleging that Musk essentially negotiated against himself in designing the award and failed to properly inform shareholders. After years in Delaware’s Chancery Court, a judge ruled in 2024 that the plaintiff was right and struck down the pay package.

Tesla appealed the decision to the state’s supreme court while running a public‑affairs campaign that included a “re‑voting” on the package to demonstrate that shareholders were not duped. During this period, Musk threatened to leave Tesla to develop artificial intelligence elsewhere, prompting the board to create the $29 billion interim award as a hedge and to work on a much larger and far more ambitious compensation package worth up to $1 trillion.

Impact on the $1 trillion package

The revocation of the interim award has no impact on Musk’s $1 trillion package. To access the full amount, Musk must lead Tesla through a series of operational milestones (e.g., delivering 20 million vehicles, producing a million robots, and putting one million robotaxis on the road) and increase the company’s valuation to more than $8 trillion over ten years.

Milestone estimates in the filing

Tesla disclosed that it is beginning to make its own estimates about which milestones Musk might achieve:

• Probable operational milestone: Unrecognized stock‑based compensation expense of $9.97 billion for the milestone considered probable of achievement over the term of the award.
• Non‑probable operational milestones: Unrecognized stock‑based compensation expense ranging from $105.82 billion to $120.37 billion for milestones deemed not probable of achievement (specific milestones were not identified).

While Musk has ten years to accomplish all goals tied to the trillion‑dollar package, many of these operational milestones are watered‑down versions of promises he’s previously made. Tesla itself appears uncertain about his ability to meet several of them.

Share‑sale restrictions

The filing also notes that Tesla’s board has imposed barriers on how and when Musk can sell shares from the now‑restored 2018 package “to mitigate any negative impact of significant share sales on the Company.” These restrictions align with those in the $1 trillion pay package:

• Musk must remain CEO or a product‑development executive through at least 2028 for the shares to vest.
• He must hold the shares for five years.