Elon Musk’s $56B Tesla Pay Package Restored by Delaware Supreme Court

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 Delaware's highest court said that cancelling 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 reached an all-time high this week, the reinstated package would be worth approximately $140 billion, according to Bloomberg.

The state supreme court's decision likely ends a years-long battle that left a bad taste in Musk's mouth, prompting him to move Tesla's incorporation from Delaware to Texas, prompting 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 likely revoke the $29 billion pay package it offered Musk earlier this year, which was intended as a hedge against the possibility that the company could lose its Delaware Supreme Court appeal. The $1 trillion compensation package awarded to Musk in November is separate from that and will continue to exist, giving Musk ambitious goals to meet to unlock its full value.

The 2018 award also set milestones that Musk had to meet to unlock the full value. Musk and Tesla met all of those goals, but not before a shareholder filed suit in 2018 over the award, arguing that it had been improperly negotiated and that shareholders weren't adequately informed of the conflicts of interest involved.

Musk and many Tesla supporters decried the lawsuit as absurd, particularly that the plaintiff — a former corporate defence lawyer and heavy metal drummer named Richard Tornetta — owned only nine shares of the company's stock.

After years of back-and-forth, including a trial at which Musk testified, the Chancery Court judge overseeing the case ruled in favour of 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.