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Elon Musk Awarded $29B ‘Good Faith’ Stock Bonus by Tesla Amid Legal Battle Over Failed $56B Pay Package

Tesla’s board has awarded CEO **Elon Musk approximately $29 billion in restricted stock**, positioning it as a “first step, **good faith**” move to honor his overturned 2018 pay package—previously valued at around $56 billion but voided by Delaware courts in 2024 The Guardian explains the context and **Reuters covers key details** about the interim grant.

The board’s decision grants **96 million shares**, exercisable at the original $23.34 per-share price from 2018, but only if Musk remains in an executive role over the **next two years**, with a mandatory **five-year holding period**. If the original award is reinstated upon appeal, the new grant will be automatically forfeited to avoid “double-dipping” as Reuters reports and **Business Insider terms it a “CEO Interim Award”** voided previous package coverage.

“This award is a critical first step toward retaining Elon’s leadership and honoring the original 2018 bargain.”

In their shareholder letter, **board chair Robyn Denholm and Kathleen Wilson‑Thompson** emphasized that Musk had not received meaningful compensation since 2017. They acknowledged investor concerns about his focus, citing his numerous ventures—including **SpaceX, xAI, Neuralink**, and political involvement—stating the grant helps ensure Tesla remains his primary priority Guardian quote on preserving focus and **Tesla filing summarized in AP News** on board’s rationale.

The move bolsters Musk’s voting stake—from approximately **13% to around 15–20%**, increasing his control amid ongoing governance scrutiny. **Wedbush analyst Dan Ives** called the move essential, saying it addresses uncertainty over Tesla’s leadership and removes a valuation overhang on the stock Ives’s market insight via Reuters and **Teslarati outlines governance implications** on control concerns.

The board characterized the award as major yet precautionary, underlining Tesla’s shift toward **AI, humanoid robotics and robotaxi operations**. It’s viewed as a strategic retention tool amid a global **war for top-tier AI talent** and Tesla’s growing ambitions beyond electric vehicles Business Insider on AI pivot and **Guardians’ look at Tesla’s next phase** corporate strategy explained.

Despite the massive valuation, critics warn of governance risks: Musk’s compensation has repeatedly drawn lawsuits and SEC scrutiny, and his political affiliations—particularly support for Donald Trump—have alienated parts of Tesla’s customer base, with brand loyalty among owners plunging from 73% in June 2024 to under 50% by mid-2025 Guardian on loyalty drop and **Reuters reports brand damage** on declining sales sentiment.

Investor groups have questioned Musk’s political entanglements and whether his split attention is appropriate for such a pivotal role. In past legal filings, Delaware courts have described the $56B package as “unfathomable” and unfair—voicing alarm over Musk’s influence over Tesla’s board decisions as detailed in public legal records and **AP News outlines the ruling and appeal** on the court’s reprimand.

As Tesla shifts from a carmaker to a technology firm, the board’s stock award reflects a gamble: that Musk remains the indispensable visionary for AI innovation. Yet it risks alienating shareholders and regulators concerned about executive pay, corporate independence, and Musk’s growing empire of influence.

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