The point is that time will tell if this really saves money over the long run. I do not know the law and I am not questioning the board here.
If the board was representative of the shareholders wishes, the shareholders wouldn't have sued the board.
They want Elon compensated with the bonus he hit very difficult growth targets to earn because they want to make money from him further growing the company.
If they just donate the shares they personally bought, then they don’t make money. They lose it.
Those billions could have gone directly to shareholders as dividends, or reinvested in the company for future growth. Either of these would be better at making money for investors. I question the logic that giving it to Elon will motivate him any differently than a lesser, but still very generous compensation would have.
It is presumed here that money is what is driving Elon (or other already billionaires). This is only ever partially true. People like him also love the power of being in charge and notoriety. Those are likely worth more than the money for Elon in particular. The board and investors should, as is their fiduciary duty, pay the minimum needed to keep him doing what he's doing.
Not only that, but I think it's a real loss for the US in general and Deleware in particular as a good environment for business that respects property rights. Some guy with nine shares of stock overrode the wishes of over 3/4 of the shareholders and his lawyers may extract billions from the company which the market clearly sees as having been harmed by their actions.
Granted 56 billion is a lot.