Delaware revives Musk’s mega Tesla payday package
The Delaware Supreme Court has reinstated Elon Musk’s 2018 Tesla compensation plan, reversing the Delaware Court of Chancery’s decision that had voided the award. The package was originally valued at about $56 billion and, based on Tesla’s current share price, is now estimated at roughly $139 to $140 billion.
In a unanimous ruling, the court said that fully canceling the plan left Musk “uncompensated for his time and efforts” over six years, even while acknowledging flaws in the original approval process and disclosures. The decision restores a stock-option award tied to performance milestones that Tesla ultimately achieved, and it limits the remedy to nominal damages rather than rescission.
For executives and boards, the decision has immediate operational implications. Reuters and the Financial Times reported Tesla is expected to unwind an interim pay grant that had been offered as a hedge while the appeal was pending, while a separate newer compensation framework approved by shareholders remains in place.
The ruling also lands in the middle of a broader governance debate with real capital-markets consequences. Musk had already shifted Tesla’s incorporation from Delaware to Texas during the dispute, and the case has been watched closely by founders, institutional investors, and lawyers because Delaware’s courts are central to how United States corporate governance norms are enforced. The latest outcome may reduce some uncertainty for companies that rely on Delaware’s legal predictability, but it also reinforces that boards must document independence, disclose conflicts clearly, and structure shareholder approvals carefully, especially when compensation is linked to transformational bets such as electric vehicles and artificial intelligence.
