The Delaware Supreme Court has reinstated Elon Musk’s $56 billion Tesla pay package from 2018, overturning last year’s ruling by the state’s Chancery Court, according to an opinion published Friday.
In a unanimous ruling, the judges on the highest court in Delaware said that canceling Musk’s package left him “uncompensated for his time and efforts over a period of six years.” Adjusted for Tesla’s current stock price, which hit all-time highs this week, the reinstated package would be worth around $140 billion, according to Bloomberg.
The state supreme court’s decision likely draws to a close a years-long battle that left such a bad taste in Musk’s mouth that he moved Tesla’s incorporation from Delaware to Texas, which prompted other companies to follow suit.
“Vindicated,” Musk posted to X on Friday in response to the news. “Thank you for your unwavering support,” he replied to Alexandra Merz, a vocal shareholder known as “TeslaBoomerMama.”
Tesla will now likely revoke a $29 billion pay package it offered Musk earlier this year, which was meant as a hedge against the possibility that the company could lose the Delaware Supreme Court appeal. The $1 trillion compensation package awarded to Musk in November is separate from that, and will continue to exist going forward, giving Musk a series of lofty goals to hit in order to unlock the full value.
The 2018 award also set out a number of milestones that Musk had to hit in order to unlock the full value. Musk and Tesla hit all of those goals, but not before a shareholder filed suit over the award in 2018, arguing that it had been improperly negotiated and that shareholders weren’t properly informed of the conflicts of interest at play.
Musk and the many Tesla supporters decried the lawsuit as absurd, particularly the fact that the plaintiff — a former corporate defense lawyer and heavy metal drummer named Richard Tornetta — only owned nine shares of company stock.
After years of back-and-forth, including a trial where Musk testified, the Chancery Court judge overseeing the case agreed with the plaintiff and initially struck down the pay package in January 2024. Tesla held a vote at its annual meeting in 2024 where shareholders “re-approved” the package, but the judge confirmed her decision in December 2024. Tesla appealed soon after.
TechCrunch