Tesla has awarded Elon Musk a $29 billion bonus to retain him as chairman of the company

Tesla has decided to provide CEO Elon Musk with a compensation package in the form of restricted shares worth a total of $29 billion, NotebookCheck writes.

A statement from the Special Committee of the Board of Directors, posted on social media platform X, said the new compensation structure is intended to encourage Musk to remain at Tesla, especially as the company transitions to “leadership in artificial intelligence, robotics and related services.” The package includes 96 million shares worth $29 billion, but requires Musk to remain in office for two years and has a five-year stock vesting period.

The decision comes amid a legal battle with investor Richard Tornetta, who challenged a similar award in 2018. Delaware Chancery Court Judge Kathleen McCormick ruled in 2024 that Musk was not entitled to the then-$56 billion award. Despite a second shareholder vote, the court overturned the award for the second time.

The new payment will be voided if Delaware courts fully reinstate the previous compensation. Tesla must also pay Tornetta's lawyers $345 million in legal fees, even though they were seeking about $5.5 billion in Tesla stock.

Tesla's decision also addresses Musk's concerns about the potential erosion of his control over the company and the risk of losing influence due to activist investors. The proposed package would gradually restore his voting rights, reducing the risk of ouster.