The Delaware Supreme Court has reinstated Elon Musk’s $56 billion Tesla pay package from 2018. This ruling overturns last year’s decision by the state’s Chancery Court. The state supreme court’s decision concludes a years-long legal battle that left Musk so dissatisfied he moved Tesla’s incorporation from Delaware to Texas, a move that prompted other companies to follow.
Tesla will now likely revoke a separate $29 billion pay package it offered Musk earlier this year. That package was created as a hedge against the possibility of losing this Delaware Supreme Court appeal. Another compensation package awarded to Musk in November, valued at $1 trillion, is separate and will continue to exist. That package gives Musk a series of lofty goals to hit in order to unlock its full value.
The 2018 award also set out specific milestones for Musk to achieve to unlock its full value. Musk and Tesla met all those goals, but not before a shareholder filed a lawsuit in 2018. The shareholder argued the award was improperly negotiated and that investors were not properly informed about conflicts of interest.
After years of litigation, including a trial where Musk testified, the Chancery Court judge agreed with the plaintiff and initially struck down the pay package in January 2024. Tesla held a shareholder vote at its 2024 annual meeting to re-approve the package, but the judge confirmed her decision to void it in December 2024. Tesla appealed soon after that confirmation.
This story is developing.