Elon Musk just scored a massive legal victory. On Friday, the Delaware Supreme Court ruled that he gets to keep his 2018 Tesla pay package, which was worth about $56 billion when it first vested. The judges decided that a lower court went too far when it cancelled the compensation plan in its entirety last year.
Instead of stripping Musk of the stock options, the Supreme Court reversed the cancellation order. The judges argued that the lower court failed to give Tesla a chance to suggest a fairer compensation amount before throwing the whole deal out. As a formality, the court awarded the plaintiff only $1 in damages.
This ruling likely ends a years-long legal battle known as Tornetta v. Musk. Back in January 2024, a Delaware judge blocked the payout, arguing that Musk held too much control over the Tesla board and that directors failed to give shareholders the full picture before they voted on the deal. While the Supreme Court returned Musk’s shares, legal experts note that the court did not overturn the finding that the board process was unfair.
Musk, who is already the world’s wealthiest person with a net worth of nearly $680 billion, fought hard for this outcome. After the initial loss, he moved Tesla’s corporate home out of Delaware and publicly criticized the judge on X.
The decision comes at a busy time for Tesla. Just last month, shareholders approved a new, even larger 2025 pay plan worth up to $1 trillion over the next decade if the company hits specific targets. That new plan also aims to increase Musk’s voting control to 25%. Since the court reinstated the original 2018 deal, a backup plan that shareholders recently approved is now null and void.
Lawyers for the shareholder who sued expressed pride in holding the board accountable, even with the reversal. For Musk, however, the decision secures his historic payday and solidifies his grip on the electric car maker.
