The move comes after a US court struck down his 2018 pay package, worth more than $50billion, ruling that it was "unfair to shareholders". Musk has been appealing against the decision made by the Delaware court in 2024 and on Monday Tesla told shareholders it was "confident" that the $29billion of shares "will incentivize Elon to remain at Tesla" especially as "the war for AI talent is intensifying".

The award should boost Musk's voting power on the electric car company's board. "It is imperative to retain and motivate our extraordinary talent, beginning with Elon", Tesla's board wrote on X, a platform owned by Musk, adding that "no one matches Elon's remarkable combination of leadership experience, technical expertise". The company said the billionaire had a "proven track record" in building "revolutionary and profitable businesses". Tesla said if the Delware court reinstated Musk's 2018 pay deal, he would forfeit or return the latest share award to avoid a "double dip".

The carmaker's board said it hoped its chief executive could be awarded the deal worth $56billion, which would be the biggest pay deal in corporate American history. The deal was structured in such a way that if Mr Musk did not hit certain milestones – such as Tesla's market value, sales and underlying profit – he would not get paid at all. But he achieved the targets that were laid out.

Musk's appeal to get his pay packet reinstated argues that the lower court made legal errors when rescinding his pay package. He has previously said that it should be company shareholders who decide pay. Dan Ives from Wedbush Securities told the BBC that Tesla's move was "what they need to do to keep him [Musk] at the firm". "The biggest asset for Tesla is Musk, the board need to do this, and I believe it's a huge step forward." He added that during the "AI arms race", the firm could not afford to have Musk only "semi-committed". (BBC/ Getty Images)