The Delaware Supreme Court reinstated Elon Musk’s $56 billion Tesla pay package from 2018, overturning last year’s decision by the state’s chancellor, according to an opinion which was published on Friday.
In a unanimous decision, the judges in the highest court in Delaware said that the cancellation of Musk’s package left him “without compensation for his time and efforts over a period of six years.” Adjusted for Tesla’s current share price, which hit an all-time high this week, the restated package would be worth about $140 billion. according to Bloomberg.
The state’s highest court ruling likely caps a years-long battle that left Musk with such a bad taste that he moved Tesla’s company from Delaware to Texas, prompting other companies to follow suit.
“Justified”, Mask was posted in X on Friday in response to the news. “Thank you for your unwavering support,” he said he answered to Alexandra Merz, a vocal shareholder known as “TeslaBoomerMama.”
Tesla will likely now withdraw a $29 billion pay package it offered Musk earlier this year, which was intended as a hedge against the possibility that the company would lose a 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 set of lofty goals to hit in order to unlock the full value.
The 2018 award also set a number of milestones that Musk needed to achieve to unlock the full value. Musk and Tesla achieved all of those goals, but not before a shareholder filed a lawsuit over the award in 2018, alleging that it had been improperly negotiated and that shareholders had not been properly informed of conflicts of interest.
Musk and Tesla’s many 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 he owned nine shares of the company.
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After many years, including a trial where Musk testified, the Chancery Court judge overseeing the case agreed with the plaintiff and initially rejected the pay package in January 2024. Tesla held a vote at its 2024 annual meeting where shareholders “re-approved” the package, but the judge soon affirmed the December 20 ruling4.
