No KPIs, no minimum revenue, no target stock value, all Elon Musk needs to do is stay at Tesla for 2 years and receive a $29 billion bonus.

With a $29 billion bonus just approved by Tesla’s board of directors, Elon Musk is once again confirmed as the highest-paid CEO in history.

However, unlike the performance-tied bonuses in the past, this time, all Musk needs to do to receive the full reward is to “stay” at Tesla for another two years. No KPIs, no minimum revenue, no target stock value—just keep being present.

Gambling

Tesla’s board of directors described this bonus as “necessary” to keep Musk in the context of an escalating global AI personnel war, where good engineers can also receive hundreds of millions of dollars. But when most companies set strict KPIs for large compensation packages, Tesla chooses to “pay upfront” — a way of expressing absolute trust, or a dangerous dependence on an individual.

The new bonus package, worth about $29 billion, includes 96 million restricted shares. It’s worth noting that, the terms of this plan are much simpler than the old plan. To receive these shares, Musk only needs to hold the role of CEO or a senior executive position for the next two years and hold those shares until 2030.

The lack of complex performance targets like the previous package has led some experts to call it nothing more than a mere bonus to keep Elon Musk around.

This move to pay rewards did not take place in a legal vacuum. Previously, Musk’s $56 billion 2018 bonus package was canceled by a Delaware court, arguing that the board lacked independence and was too biased towards the CEO.

Refusing to lose, Tesla moved its registration from Delaware to Texas – which has a more “breathable” legal framework for regulators – and amended its charter to require shareholders who want to sue to own at least 3% of the shares (equivalent to more than $3 billion). A legal shield is erected to protect the bonus.

This is not just a matter of salary, but a statement: Tesla is now Elon Musk’s “kingdom”.

Unlike the 2018 bonus package that forced Musk to take the company’s value to new heights, this time, the condition is just “don’t leave”. With Tesla’s stock price above $300 per share, Musk will have a profit of nearly $280 per bonus share if he spends money to buy at the fixed price of $23.34. This is not a reward stock for achievement but a form of low-risk gift to retain the billionaire who has been associated with the Tesla brand.

In a letter to shareholders, Tesla’s Board of Directors emphasized the importance of retaining and motivating Musk’s “extraordinary talent”. They argue that this bonus is necessary for Musk to continue to focus on Tesla, especially in the context of fierce competition for AI, robots and robotaxis.

However, this decision has been met with many mixed opinions. Musk’s supporters believe he is the main driving force behind Tesla’s growth, which has helped the company’s value increase 12 times since 2018. The new bonus package is considered a worthy recognition for his contribution.

On the contrary, many institutional investors and pension funds criticized harshly. They argue that the nearly $30 billion compensation package is “absurd,” especially when Tesla is struggling with declining sales and stock prices. They questioned the Board’s responsibility to shareholders, arguing that it was “indulging” a greedy CEO instead of focusing on the company’s long-term growth.

So far, Tesla’s stock price has fallen by more than 18% in 2025, sales have fallen short of expectations, and Musk is busy with outside projects, from Twitter (now X) to controversial political statements. Some major investors argue that the board “is paying for a CEO who is not wholehearted”, while the company needs more focus than ever to compete in electric vehicles, AI and self-driving robots.

Consequences

Elon Musk’s $29 billion bounty didn’t come out of nowhere. That’s the value Musk can draw from the stock — that is, the diluted value from existing shareholders. Retirees investing in pension funds, retail investors — all are contributing to the “pledge of loyalty” from a billionaire who has nearly $200 billion in assets.

The question is whether Musk still sees Tesla as a priority in his ambitious portfolio? Otherwise, the $29 billion bonus is simply the cost of the company retaining a brand image instead of a real driver.

In addition to the controversy over business ethics, Tesla’s decision also opened an unprecedented precedent in corporate governance. The new bonus package includes a special clause: if the court reinstates any part of the original remuneration package, the new package will be reduced accordingly. This shows that Tesla is trying to create a “guarantee” for Musk, regardless of the outcome of the legal battle in Delaware.

Tesla’s move to Texas is also an important strategic step. Texas laws are said to be more lenient than Delaware’s in matters related to corporate governance.

Analysts are watching closely to see whether Texas courts will adopt a Delaware-like legal framework or will usher in a new approach that could reshape the way large companies operate in the future.

The $29 billion bonus is a declaration of Elon Musk’s power within Tesla, but also a stern test for American investors and corporate law.

When a CEO can rewrite the law to protect his own salary, the line between leadership talent and absolute power is blurring.

In the next two years, Musk will likely help Tesla fly high again. But otherwise, this $29 billion could go down in history as one of the most mistaken spending Wall Street has ever seen.

*Source: Fortune, BI