Tesla has officially withdrawn the interim pay package of $29 billion awarded to CEO Elon Musk last year. This decision comes in light of a recent ruling by the Delaware Supreme Court, which reinstated Musk's original compensation package of $56 billion from 2018.
Initially granted in August 2025, the interim package was a precautionary measure by Tesla to safeguard against potential rejection of Musk's appeal by the state's highest court. The company had communicated to investors that this interim award would be nullified if Musk succeeded in his appeal, emphasizing the principle of "no double dip."
In its quarterly filing with the Securities and Exchange Commission, Tesla confirmed that the interim award was rescinded on April 21. The board made this decision without the involvement of Musk or his brother, Kimbal Musk, who also serves as a director.
Tesla stated, "These actions are consistent with the 'no double dip' principle, which prevents Mr. Musk from receiving excess benefits should he exercise the 2018 CEO Performance Award." The 2018 compensation package had faced legal scrutiny from a shareholder who claimed Musk had not adequately informed them during its negotiation.
Following a lengthy legal battle that concluded in 2024, a judge ruled in favor of the plaintiff, leading to the annulment of the initial pay package. During the appeals process, Tesla engaged in a public relations effort to demonstrate shareholder support for Musk, which included a re-vote on the package.
Interestingly, while the revocation of the interim award does not affect Musk's ambitious $1 trillion compensation plan, he must achieve several operational milestones over the next decade to qualify for it. These milestones include delivering 20 million vehicles and deploying one million robotaxis.
Tesla has also begun to make its own assessments regarding which of these milestones Musk is likely to achieve. The company noted an unrecognized stock-based compensation expense of approximately $9.97 billion for operational milestones deemed probable, while additional expenses of up to $120.37 billion were noted for those considered less likely.
To further secure its interests, Tesla's board has implemented restrictions on Musk's ability to sell shares from the restored 2018 package, aiming to minimize any adverse effects on the company from significant share sales. These measures align with similar stipulations in the trillion-dollar compensation plan, requiring Musk to remain in a leadership role through at least 2028 and mandating a five-year holding period for shares.
This recent development showcases Tesla's commitment to aligning executive compensation with performance and shareholder interests, setting a precedent that could influence how companies structure executive pay in the future.