The Delaware Supreme Court has reinstated Elon Musk’s $56 billion Tesla pay package from 2018, ruling that canceling it would leave him uncompensated for six years of work. The decision was unanimous and marks the end of a long legal battle over Musk’s compensation.
With Tesla stock reaching record highs this week, Bloomberg estimates the reinstated package is now worth approximately $140 billion. The ruling likely concludes the protracted dispute that contributed to Elon Musk moving Tesla’s incorporation from Delaware to Texas, a shift that other companies have also followed.
Elon Musk celebrated the court decision on X, posting “Vindicated” and thanking shareholder Alexandra Merz for her support. The ruling may also lead Tesla to rescind a separate $29 billion pay package granted earlier this year, which served as a backup in case Musk lost the appeal.
The original 2018 package had its own performance milestones and was fully unlocked by Musk. However, it was challenged in a shareholder lawsuit alleging improper negotiation and insufficient disclosure of conflicts of interest. Critics, including Musk and Tesla supporters, dismissed the lawsuit as trivial, noting that the plaintiff, Richard Tornetta, owned only nine shares of Tesla stock.
After years of legal proceedings, the Chancery Court initially struck down the package in January 2024. Despite Tesla shareholders re-approving it at the 2024 annual meeting, the judge reaffirmed her decision in December 2024, prompting an appeal that has now been resolved.
Elon Musk’s reinstated pay package is separate from the $1 trillion compensation plan awarded to him in November, which remains active and depends on achieving ambitious performance targets. The reinstatement of Elon Musk’s 2018 package highlights the ongoing impact of corporate governance disputes on executive compensation.
The ruling reinforces the value of performance-based pay for top executives and underscores Elon Musk’s influence on Tesla’s growth and strategic direction.
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