Elon Musk has exercised the entirety of his 2018 Tesla (TSLA) CEO pay package, acquiring 303,960,630 shares for a paper gain of about $116 billion, according to a new SEC filing.
But he didn’t sell a single share to do it — and the stock he received is locked up until 2028.
What the filings show
Tesla filed a Form 4 and a Schedule 13G amendment with the SEC on June 17, both reporting a transaction dated June 16, 2026.
Musk exercised options on 303,960,630 shares at a split-adjusted strike price of $23.34. Tesla closed at $404.66 that day, which puts the spread — the difference between what he paid and what the shares are worth — at $381.32 per share.
That works out to roughly $115.9 billion in gains in a single transaction. It is the formal delivery of the 2018 award, one of the largest equity events in corporate history.
The original 2018 grant was for 20,264,042 shares at $350.02. Tesla’s 5-for-1 split in 2020 and 3-for-1 split in 2022 adjusted that down to 303,960,630 shares at $23.34.
No open-market sale
The filing is explicit that the transaction “did not involve any open-market sales of securities.”
Exercising 304 million options at $23.34 carries an exercise cost of about $7.1 billion. Rather than pay cash, Musk used “net settlement,” and Tesla withheld 17,531,857 shares — worth roughly $7.1 billion at $404.66 — to cover the bill.
That leaves him with 286,428,773 net new shares. But there is a catch: those shares are restricted and do not vest until January 19, 2028, subject to a service-based condition. He cannot sell them today.
The numbers don’t match — here’s why
The Form 4 reports Musk beneficially owning 710,172,677 shares directly, plus another 413,152,109 held indirectly through the Elon Musk Revocable Trust.
The Schedule 13G filed the same day reports a different figure: 699,580,882 shares, or 19.9% of Tesla.
The gap is the 2025 CEO Performance Award. The Form 4’s total includes 423,743,904 shares from that separate, much larger package, while the 13G excludes them. Musk disclaims beneficial ownership of those shares because they sit under a voting agreement, with an irrevocable proxy handed to Tesla’s corporate secretary to vote them in line with other shareholders. The 13G also nets out a 96-million-share interim award that was forfeited on April 21.
The end of the Tornetta saga
This exercise closes the book on a six-year legal fight. Delaware Chancellor Kathaleen McCormick rescinded the 2018 award in 2024, ruling Tesla’s board was conflicted and that shareholders were misled. The Delaware Supreme Court reversed that decision in December 2025, finding full rescission too extreme.
Tesla’s board signed an “Implementation Agreement” on April 21, 2026, and filed to deliver the shares days later. Musk delivered his exercise notice on June 9, triggering the five-business-day window that closed on June 16.
It is a completely separate package from the $1 trillion 2025 pay award that shareholders approved in November, which vests in tranches as late as 2035 and which a SpaceX-Tesla merger could partially trigger.
A massive tax bill is coming
Because these are non-qualified stock options, the $116 billion spread is taxed as ordinary income, not capital gains.
At the top federal rate of 37%, plus Medicare surtaxes, that points to a federal tax bill in the neighborhood of $45 billion. Musk’s Texas residency means he owes no state income tax — a saving of roughly $15 billion versus what California would have claimed.
Though the state might still try to claim some, since Musk still works for frequently in California.
The timing is the open question. Because the shares are restricted until 2028, the tax event may be deferred to vesting unless Musk files an election to be taxed now. When he exercised his separate 2012 award in 2021, he paid more than $11 billion in taxes — and this event is far larger.
Electrek’s Take
The headline number is staggering, but the framing matters. Musk didn’t “make” $116 billion in cash on Tuesday. He converted long-held options into restricted stock he can’t touch until 2028, and he did it without selling a single share — which is exactly what Tesla shareholders should want, because no shares hit the open market to pressure the price.
What this really does is lock in Musk’s control. Between this award and the 2025 package, his voting position is the entire point. He control 20% of Tesla’s shares – making by far the largest shareholder.
The thing worth watching now is the tax bill. A federal liability in the tens of billions eventually has to be funded, and Musk has historically done that by either selling Tesla stock or borrowing against it. With the shares restricted until 2028, borrowing looks like the more likely path in the near term. The bigger question for shareholders: after six years of litigation, a Supreme Court reversal, and a fresh trillion-dollar package on top, is Tesla’s compensation structure now built around the company’s mission — or around keeping one man in control?
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