09:29 AM EDT, 08/04/2025 (MT Newswires) -- Tesla (TSLA) awarded Elon Musk 96 million restricted shares of the automaker's stock as it seeks to keep the chief executive focused on the firm that's looking to transition increasingly into artificial intelligence and robotics.

The compensation package, worth about $29 billion based on Friday's closing share price, will vest after two years if Musk stays as CEO or in an executive position responsible for product development or operations, Tesla said in a regulatory filing on Monday.

"We are confident that this award will incentivize Elon to remain at Tesla and focus his unmatched leadership abilities on further creating shareholder value for Tesla shareholders and attracting and retaining talent at Tesla," board chair Robyn Denholm and director Kathleen Wilson-Thompson said in a letter to shareholders. "To be clear, losing Elon would not only mean the loss of his talents but also the loss of a leader who is a magnet for hiring and retaining talent at Tesla."

Denholm and Wilson-Thompson formed a special committee earlier this year to deal with issues around Musk's compensation at a time when his 2018 pay package continued to be disputed in a Delaware court. If the court reinstates the 2018 award, Musk won't be able to keep the new compensation along with the previous performance award, Denholm and Wilson-Thompson said.

Musk will have to pay $23.34 per restricted share that vests under the new compensation package, equal to the exercise price of the 2018 award, according to the filing.

Tesla's shares rose 2.1% pre-market on Monday. Wedbush Securities analyst Daniel Ives said in a note that the pay package removes some uncertainty on the stock. The shares sank 25% so far this year as investors worried about Musk's shifting focus, including his stint with the White House. Tesla's brand loyalty took a hit from Musk's involvement with politics and US President Donald Trump, Reuters reported on Monday, citing data from S&P Global Mobility.

"We believe this grant will now keep Musk as CEO of Tesla at least until 2030 and removes an overhang on the stock," Ives wrote in a note Monday. "Musk remains Tesla's big asset and this comp issue has been a constant concern of shareholders once the Delaware soap opera began."

Denholm and Wilson-Thompson said Tesla is "at a critical inflection point" as it transitions from electric vehicles and renewable energy to AI and robotics. Tesla started offering rides in its self-driven Robotaxi in Texas recently, and Musk touted the company's Optimus robot as possibly the "biggest product ever" on a conference call with analysts last month.

"I do think if Tesla continues to execute well with vehicle autonomy and humanoid robot autonomy, it will be the most valuable company in the world," Musk said on the call July 23.