Tesla’s roughly $29 billion headline was an estimate of 96 million restricted shares approved for Elon Musk in August 2025—not a cash payment. Tesla later reported that the interim award was forfeited in April 2026 after the company’s 2018 CEO award was reinstated. The later, milestone-based 2025 CEO Performance Award is a separate grant.
What Tesla approved in August 2025
On August 3, 2025, Tesla’s board approved a CEO Interim Award covering 96 million restricted shares under the company’s 2019 Equity Incentive Plan. The board’s two-member special committee—directors Robyn Denholm and Kathleen Wilson-Thompson—recommended it. Elon Musk and director Kimbal Musk recused themselves from the board’s approval.
The word “interim” matters: the award was structured as a temporary grant while the legal status of Musk’s 2018 CEO Performance Award remained unresolved. It was not 96 million shares delivered outright on the approval date.
Why the headline said $29 billion
The roughly $29 billion figure was a contemporaneous market-value estimate, not a cash payment or a fixed accounting charge. TechCrunch reported that estimate using Tesla’s share price at the time. It also estimated the shares’ value after accounting for the $23.34-per-share purchase price at roughly $26.7 billion, based on the then-current premarket price. These estimates depended on the share price and calculation method.
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Tesla gave a different, conditional figure for accounting purposes: approximately $23.7 billion in illustrative grant-date fair value, assuming the award had been approved on August 1, 2025 and using the share-price assumptions in its filing. Tesla said the actual accounting fair value would be determined later, based on the prevailing share price less the purchase price, with adjustments for illiquidity and the probability of satisfying the performance condition. At the time, Tesla said it did not expect that condition to be probable and could not predict whether it would recognize compensation expense.
| Figure | What it represents |
|---|---|
| 96 million shares | Restricted shares covered by Tesla’s August 3, 2025 interim award. |
| About $29 billion | TechCrunch’s contemporaneous estimate of market value, based on Tesla’s share price at the time. |
| About $26.7 billion | TechCrunch’s estimate after the $23.34-per-share purchase price, using the then-current premarket price. |
| About $23.7 billion | Tesla’s illustrative accounting grant-date fair value under the hypothetical August 1 approval and stated assumptions—not the final accounting value. |
What the interim award required
The grant had conditions that affected whether Musk could receive and keep the shares:
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- Eligible service: The shares were scheduled to vest on August 3, 2027, the second anniversary of the grant, provided Musk continuously served through that date as CEO or as an executive officer responsible for product development or operations.
- Purchase price: Musk would have to pay $23.34 per vested share.
- Holding restriction: Shares were subject to a five-year holding restriction beginning on the August 3, 2025 grant date, with exceptions that included obligations for taxes and the purchase price.
- No double recovery: The award provided for early forfeiture if a final, non-appealable court decision enabled Musk to exercise the 2018 CEO Performance Award in full. It also included a mechanism intended to prevent him from receiving the full economic benefit of both awards.
Accordingly, when announced, the grant was neither vested nor freely transferable. Its headline value did not mean Musk had received that amount in spendable cash.
What Tesla meant by an “AI talent war”
Tesla cited competition for AI talent and resources as a reason for the award. In its preliminary proxy materials, the company said: “This competition has driven a race to secure top AI talent, including through nine-figure compensation packages.” Tesla’s special committee argued that losing Musk could put both his leadership and the interest of AI talent in joining Tesla under his leadership at risk.
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That is Tesla’s stated retention rationale, not independent proof of a market-wide compensation trend or evidence that the grant successfully retained Musk or improved recruiting. The company placed the argument in a broader strategic context that included AI, robotics, autonomy and emerging product lines. The phrase “AI talent war” summarizes Tesla’s case; it should not be mistaken for a measured statistic about the entire AI labor market.
Why Tesla reported the award forfeited in 2026
In its first-quarter 2026 Form 10-Q, Tesla reported that the Delaware Supreme Court had reversed the Chancery Court order rescinding Musk’s 2018 CEO Performance Award. The Chancery Court entered a final order implementing that reversal on March 18, 2026. Tesla said its disinterested directors determined on April 21, 2026 that the event triggered forfeiture of the 2025 interim award. Tesla reported no stock-based compensation expense related to the interim award as of March 31, 2026.
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The filing also describes a separate implementation agreement for exercising the 2018 award. Tesla said the agreement adds no economic benefit. Under its reported terms, restricted shares issued on exercise must remain subject to continuous eligible service through January 19, 2028 to vest, and a five-year holding period starts at vesting. The agreement also provides for net settlement or cash payment of the exercise price and cooperation on tax obligations.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.The later 2025 performance award is a different grant
Tesla’s 2025 CEO Performance Award should not be confused with the interim grant or called the “$29 billion package.” Tesla’s proxy described approximately 423.7 million performance-based restricted shares divided into 12 tranches, generally about 1% each. A tranche generally requires both a market-capitalization milestone and an operational milestone; listed operating measures include vehicle deliveries, active Full Self-Driving subscriptions, bots delivered, robotaxis in commercial operation and adjusted EBITDA. For voting rights on the final two tranches, Tesla’s proxy also requires Musk to develop a CEO succession framework. Tesla’s first-quarter 2026 filing says shareholders approved this separate award on November 6, 2025.
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| Award | Structure and approval | Key conditions or status reported by Tesla |
|---|---|---|
| 2025 CEO Interim Award | 96 million restricted shares; approved by Tesla’s board on August 3, 2025. | Service-based vesting, a $23.34-per-share purchase price and a holding restriction; Tesla reported forfeiture in April 2026 after reinstatement of the 2018 award. |
| 2025 CEO Performance Award | Approximately 423.7 million performance-based restricted shares in 12 tranches; shareholders approved it on November 6, 2025. | Tranche vesting is generally tied to market-capitalization and operational milestones; the final two tranches have an additional succession-framework condition for voting rights. |
| 2018 CEO Performance Award | Options under the earlier performance award; the Delaware Supreme Court reversed the order that had rescinded it, as reported by Tesla in its first-quarter 2026 filing. | Tesla described a separate implementation agreement for exercise, including service and holding terms for restricted shares issued on exercise. |
The awards differ in form as well as timing: the interim grant covered restricted shares and depended on continued eligible service, while the later 2025 performance award uses milestone-based tranches. The 2018 award involved options. Treating all three as one grant obscures the distinct approvals, conditions and legal developments.
Sources and status date
The award terms and later status described here are based on Tesla’s August 2025 Form 8-K, its proxy materials and its first-quarter 2026 Form 10-Q. The market-value estimates are attributed to TechCrunch’s contemporaneous coverage. The status described reflects Tesla’s reported information through its first-quarter 2026 filing and April 21, 2026 forfeiture determination.
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