Elon Musk Wins Court Case in Massive ‘$139bn’ Tesla Pay Deal
Elon Musk’s controversial 2018 pay package at Tesla has been reinstated by the Delaware Supreme Court, two years after a lower court struck it down as “unfathomable”.
The compensation deal, originally valued at $56bn, could now be worth as much as $139bn, according to The New York Times.
The ruling comes less than two months after Tesla shareholders approved a new pay plan that could be worth up to $1tn to Musk over the next decade. Musk’s personal fortune is currently estimated at about $600bn.
In their judgment on Friday, the justices said cancelling the pay package would be “inequitable” and would leave Musk “uncompensated for his time and efforts over a period of six years”. This echoed arguments earlier made by Tesla’s board.
At Tesla’s annual meeting in Austin, Texas, in November, shareholders had already approved a stopgap measure to ensure Musk would receive the $56bn, regardless of how the court ruled on the appeal.
Both the restored 2018 package and other pay plans approved by shareholders require Musk to meet demanding targets, including major product milestones and boosting Tesla’s value to $8.5tn, before he can fully cash in.
The legal battle began seven years ago when a Tesla shareholder, who owned just nine shares at the time, sued the company, arguing the package unfairly overpaid the world’s richest person. That case led to the original ruling that voided Musk’s pay.
Following that decision, Musk moved Tesla’s incorporation from Delaware to Texas and publicly criticised the state’s courts. In February 2024, he wrote on X that Chancellor Kathaleen McCormick, who led the earlier ruling, had “done more to damage Delaware than any judge in modern history”.
In 2024, Tesla shareholders were again asked to vote on the 2018 package. They approved it, but McCormick struck it down once more, ruling that the “Superstar CEO”, as she described Musk, had too much influence over his own pay and that shareholders were not fully informed.
Musk later posted online: “Any lawyer still recommending incorporation in Delaware at this point should be sued for malpractice.”
In its latest decision, the Delaware Supreme Court agreed that there had been a breach of fiduciary duty in how the original pay package was created and presented. The judges ordered $1 in nominal damages to be paid to the plaintiff.
However, the five justices ruled that fully cancelling Musk’s pay package was not appropriate, clearing the way for its reinstatement.
