Stock & Awe: Tesla Booms as Musk Makes New Demands
Tesla stock is climbing once again, but behind the rally lies a fierce legal battle, boardroom drama, and Elon Musk’s high-stakes demand for control.
Tesla’s stock continues to charge ahead, accelerating nearly 5% on Tuesday and pushing its five-day rally past the 20% mark. The catalyst? Reports from the Financial Times that Tesla’s board is actively drafting a new pay package for CEO Elon Musk—a saga that’s already become one of the most divisive and high-stakes compensation dramas in corporate history.
According to sources, a special committee consisting of Tesla Chair Robyn Denholm and board member Kathleen Wilson-Thompson is exploring how to appropriately compensate Musk amid legal chaos and shareholder backlash. The committee’s options reportedly include a fresh package of stock options or “alternative” methods of retroactive compensation, should the appeal of Musk’s original $56 billion pay plan—struck down by a Delaware court—fail to pass muster.
Musk’s original 2018 package, once the largest in corporate history, became the center of legal and investor fury after a Delaware judge ruled it was approved without sufficient oversight, transparency, or genuine negotiation. The court blasted Tesla’s board for rubber-stamping the plan, leaving shareholders fuming. And while Tesla investors reapproved the package in June 2024—following the company’s reincorporation in Texas—the Delaware judge didn’t budge, rejecting the attempt to resurrect the deal.
Now, with Tesla’s legal team appealing the ruling to the Delaware Supreme Court, the board is hedging its bets. A new pay proposal could potentially sidestep the legal landmines of the old package and shore up Musk’s increasingly fragile relationship with the company. After all, the billionaire has openly hinted he may shift his focus to ventures like X.com or his AI initiative, xAI, unless he’s granted greater ownership—ideally 20%—of Tesla.
This isn’t just about Musk’s bank account. It’s about power, influence, and control over the company’s future. Musk’s ultimatum—that he wouldn’t feel “comfortable” staying on without that level of control—sounded less like a negotiation and more like a warning shot. For Tesla, it’s a risky game. The company is navigating rising competition in the EV space, a declining demand curve, and ongoing struggles with launching affordable models. And while Musk’s increased focus on Tesla post-Q1 earnings may have reassured some investors, his ambitions in autonomous driving and humanoid robots like Optimus are still more promise than product.
It doesn’t help that Musk’s public persona has become a lightning rod for criticism. His recent embrace of Donald Trump and far-right political rhetoric has alienated mainstream consumers and damaged the Tesla brand in several markets. The brand, once synonymous with innovation and sustainability, now finds itself embroiled in polarizing political discourse—an unforced error that’s showing up in the sales data.
Complicating matters further is the board itself. Denholm, who has reportedly cashed out over half a billion dollars in Tesla stock since joining the board in 2014, has drawn fire for both her enormous personal gains and questions around corporate governance. A Wall Street Journal report suggested the board may be losing patience with Musk and could be hunting for a successor—a claim Denholm publicly denied, but one that’s left investors with more questions than answers.
Earlier this year, the board settled a shareholder lawsuit tied to excessive compensation, agreeing to return millions in board member pay. It’s yet another stain on a board that’s already facing intense scrutiny for its handling of Musk’s tenure and pay. And now, with the future of Tesla’s leadership and its stock performance hanging in the balance, all eyes are on this new committee to strike a deal that appeases both the CEO and the courts.
Tesla’s story is, as always, a collision of ambition, controversy, and market momentum. Musk remains the engine driving investor excitement—but he’s also become one of its biggest liabilities. A new pay package may calm markets for now, but it won’t erase the underlying structural issues facing the company. What happens next—especially if Delaware’s highest court strikes down Musk’s 2018 package once and for all—could define Tesla’s next chapter. For now, the stock is flying. But even rockets need fuel, and for Tesla, that fuel may well be a shareholder-approved, court-sanctioned way to keep its mercurial CEO from bolting for his next billion-dollar brainstorm.
Conclusion
Tesla’s latest stock rally proves the market still believes in Elon Musk, but belief alone can’t write paychecks—or court rulings. As the company stares down legal uncertainty, internal power struggles, and public image problems, it’s becoming increasingly clear that this isn’t just about compensation. It’s about who controls the future of Tesla, and whether that future can survive the drama surrounding its most valuable—and most volatile—asset: Elon Musk himself.