Image: Tesla
Elon Musk’s long-running legal battle over his historic 2018 Tesla compensation package is officially over. On Friday, December 19, the Delaware Supreme Court ruled that Musk’s original CEO Performance Award must be reinstated, reversing a prior decision that had voided the plan and thrown his pay into limbo.
The ruling restores Musk’s 2018 compensation package, which consists of roughly 300 million Tesla shares that were worth about $56 billion at the time the award fully vested. The decision marks a major victory for both Musk and Tesla, after years of uncertainty surrounding what has often been described as one of the most ambitious executive pay plans in corporate history.
In its decision, the Delaware Supreme Court overturned the Court of Chancery’s earlier rescission remedy, instead awarding just $1 in nominal damages. The court also ruled that the plaintiff’s attorneys are entitled to fees and expenses, with a four-times multiplier, plus post-judgment interest. Any remaining disputes over fees will return to the Court of Chancery, with no ongoing jurisdiction retained by the Supreme Court.
For Musk, the ruling resolves a compensation saga that began despite the 2018 pay package being approved not once, but twice, by Tesla shareholders before it was struck down by a lower Delaware court.
During the appeals process, Tesla’s board granted Musk an interim stock award valued at roughly $29 billion earlier this year to ensure continued alignment while the legal fight played out. The board made clear at the time that this temporary package would be forfeited if the 2018 award was ultimately reinstated, preventing any “double dip.” With the court’s decision now final, that interim compensation will instead count as an advance against the original 300 million-share award.
The ruling also comes against the backdrop of Tesla’s even more ambitious future plans. Last month, shareholders approved a historic $1 trillion compensation package for Musk, which builds on the structure of the 2018 award but raises the bar significantly. Under that plan, Musk must grow Tesla to an $8.5 trillion market capitalization to unlock the full payout, a target the board described as intentionally extreme to match Tesla’s long-term ambitions.
Musk’s financial trajectory has already been unprecedented. Earlier this month, he became the first person in history to surpass a $600 billion net worth, after crossing $500 billion in October. With the 2018 compensation plan now fully restored, one of the most closely watched executive pay disputes in modern corporate history has finally come to an end.
