Elon Musk retains title as the highest-paid CEO in history with $26 billion pay package—and the only thing he has to do is show up for two years

The Tesla board has reinstated CEO Elon Musk as the highest-paid in history with a staggering new $29 billion pay package

Thus, the nearly $30 billion award is essential to keeping Musk focused on Tesla—and getting him to recruit new talent to keep the EV manufacturer competitive in AI, robotics, and robotaxis, according to the board

Un Musk’s previous pay plan, which included significant holder value hurdles he had to overcome, all Musk has to do to collect the new award is remain with Tesla as CEO or in a senior executive role for the next two years

He also has to hold the stock until 2030, according to the terms of the award, which will boost his ownership stake from around 13% to 15%

Brian Dunn, a 40-year compensation practitioner and director of the Institute for Compensation Studies at Cornell University told Fortune Musk’s new award resembles what some experts have referred to as “fog-the-mirror grants.” “If you’re around and have enough breath left in you to fog the mirror, you get them,” said Dunn. “These don’t have performance targets.” nically, the award will be made in restricted s, but Musk has to pay $23.34 per to own the stock—the same strike price as his 2018 options

With Tesla’s stock trading at more than $300 a , the arrangement gives Musk $280 per of built-in value, which some comp experts have referred to as “discounted options.” Larry Cunningham, director of the University of Delaware’s Weinberg Center for Corporate Governance, said that regardless of how the award could be classified for accounting or tax purposes, there’s a simple and accurate description for it. “A deep-in-the-money stock option grant, awarded solely for retention,” Cunningham told Fortune in a statement

But if any part of the original grant gets reinstated, the new award will shrink accordingly, said Hoffmann. “There’s a clause that says ‘no double dipping,’” he said. “But this 96 million award could be used to make up any of the original grant if he loses in the course of the legal action.” Hoffmann said the territory the Tesla board is treading is “unprecedented” in executive compensation. “There’s no playbook for this,” said Hoffmann, who analyzed the terms of the award. “They made the first grant, it got overturned by a judge, they made another grant, got it apved by holders and then that got held up.” To level set, a holder challenge over Musk’s 2018 pay package led to a landmark opinion in which Musk’s pay was rescinded

Last December, the same judge—Delaware Court Chancellor Kathaleen McCormick—declined to reverse her previous decision, which Tesla has since appealed

He ed the award up by multiplying Tesla’s value 12-fold

But recently Tesla has struggled

And this time, the board has left little to chance

Tesla erected a significant legal barrier in May that makes a challenge to this award a lot more difficult to mete out

After McCormick’s ruling, Tesla holders apved a move from being incorporated in Delaware to Texas

In May, Texas am its code and Tesla modified its bylaws accordingly a day later

At this point, it’s un how Texas courts would apach a challenge. “It will be interesting to see whether a Texas court chooses to Delaware’s analytical framework—or instead declines to engage in similar judicial scrutiny,” said Cunningham. “The outcome could influence how other companies weigh the relative merits of Delaware versus Texas as a corporate .” Investors React to Musk’s comp Tesla has a veritable army of engaged individual retail investors, and many support Musk and have voted in favor of his comp plan twice now, getting it over the line with more than majority support

However, some pension fund leaders who oversee retirees assets invested in Tesla stock have been less than thrilled Musk’s new award. “A $29 billion compensation package for any CEO, let alone one who has been largely absent from their daily responsibilities as sales and stock value continue to fall short of investor expectations, is obscene,” said New York City Comptroller Brad Lander in a statement

Lander said Tesla’s board is enriching Musk at investors’ expense, “once again.” Illinois State Treasurer Michael Frerichs told Fortune a $29 billion comp package is “egregious on its face.” “But in light of Elon Musk’s inattention to the day to day needs of Tesla, and the company’s worse than expected stock value, the package suggests a board out of step with their responsibilities to investors,” Frerichs wrote in a statement. “With revenues falling short of expectations, the board should be less concerned with paying fealty to a greedy CEO than with long-term planning for the success of the company. holders should demand better corporate governance.” SOC Investment Group, which represented a group of investors with nearly 8 million s invested in Tesla, told Fortune in a statement that today’s announcement included a striking admission from the board. “Even an additional $24B in equity might not motivate Elon Musk to stay for two more years, let alone ensure that he devote sufficient time and attention to turn around the currently slumping sales,” SOC wrote

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