The Delaware Supreme Court overturns a lower court’s decision to reject Elon Musk’s 2018 Tesla compensation package. The package is now worth about $139 billion because the stock price has gone up. This decision backs up Musk’s work and sets a standard for how much tech giants should pay their top executives.
The Delaware Supreme Court overturned Chancellor Kathaleen McCormick’s 2024 decision, saying that the package’s cancellation was wrong and unfair because it left Musk without pay for six years of leadership that increased Tesla’s value. The deal was first approved in 2018 and was worth $56 billion at the time. It ties rewards to performance goals that Musk has already met. Tesla shareholders had approved it despite some disagreement, but the lower court said it was a breach of fiduciary duty.
In 2018, a shareholder lawsuit said the package was too big, and a trial in January 2024 showed that the board was too weak to resist Musk’s influence. Tesla appealed, saying the process was fair. Oral arguments were held in October 2025, and the decision was made on Friday. Even though a new, bigger package was approved in November 2025, this brings back the old one.
Tesla avoids a possible $26 billion loss in profits from replacement compensation at current stock prices. Musk celebrated on X as “vindicated,” but shareholders are now looking at what to do next. The decision strengthens the power of shareholder votes in disputes over corporate governance.
