The Delaware Supreme Court restored Elon Musk’s 2018 Tesla pay package, once valued at $56 billion, overturning a 2024 lower court decision that called the deal “unfathomable” and damaged Delaware’s business reputation.
By yourNEWS Media Newsroom
WILMINGTON, Del. — The Delaware Supreme Court on Friday reversed a 2024 ruling that voided Elon Musk’s 2018 Tesla compensation package, originally valued at $56 billion and later ballooning to $120 billion due to Tesla’s stock surge. The decision restores the pay deal, which was the largest in corporate history until Tesla shareholders approved an even bigger $878 billion package in November.
The 2018 Pay Plan
The 2018 deal granted Musk options for 304 million Tesla shares at a deep discount if the company hit performance milestones—which it did. The options represent 9% of Tesla’s outstanding stock, but Musk never collected them after a shareholder lawsuit by Richard Tornetta, who owned just nine Tesla shares.
In 2024, Delaware Judge Kathaleen McCormick ruled that Tesla’s board was conflicted and key facts were hidden from shareholders, calling the deal “unfathomable” and ordering it rescinded.
Musk’s Backlash and Delaware’s Reputation
Musk accused Delaware judges of being “hostile to tech founders“ and urged companies to reincorporate elsewhere. Several firms, including Dropbox, Roblox, The Trade Desk, and Coinbase, moved to Nevada or Texas. However, Delaware remains the top legal home for U.S. public companies.
Tesla’s Response and Future Plans
Tesla’s board warned that Musk could leave if he didn’t receive his pay and more voting power. In November 2025, shareholders approved a new $878 billion pay package tied to self-driving cars, robotaxis, and humanoid robots.
To avoid legal challenges, Tesla reincorporated in Texas, which requires plaintiffs to own 3% of Tesla stock—worth $30 billion—before suing. Musk is the only individual who meets that threshold.
What’s Next?
The Delaware Supreme Court’s ruling means Musk can finally collect his 2018 compensation, but the legal battle over Tesla’s governance is far from over. The November pay package—the largest ever—remains controversial, with critics arguing it further concentrates power in Musk’s hands.
“This ruling restores fairness for Elon and Tesla’s long-term shareholders,” a Tesla spokesperson said. The case underscores the tension between corporate governance, shareholder rights, and executive pay—a debate that will continue as Tesla pushes into new industries.
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