Elon Musk’s legal battle over his 2018 Tesla compensation package has finally come to an end, as the Delaware Supreme Court ruled in his favor on Friday, December 19. The court reinstated Musk’s original CEO Performance Award, which consists of approximately 300 million Tesla shares valued at around $56 billion when fully vested.
This decision marks a significant victory for Musk and Tesla, ending years of uncertainty surrounding one of the most ambitious executive pay plans in corporate history. The Delaware Supreme Court overturned the Court of Chancery’s rescission remedy, awarding just $1 in nominal damages and ruling that plaintiff’s attorneys are entitled to fees and expenses with a four-times multiplier, plus post-judgment interest.
Despite the 2018 compensation package being approved twice by Tesla shareholders before being struck down by a lower Delaware court, Musk’s legal saga is now resolved. During the appeals process, Tesla’s board granted Musk an interim stock award valued at $29 billion to maintain alignment while the legal battle unfolded. This temporary package will now count as an advance against the original 300 million-share award.
The ruling also comes as Tesla shareholders recently approved a historic $1 trillion compensation package for Musk, which sets a high bar for performance. Musk must grow Tesla to an $8.5 trillion market capitalization to unlock the full payout, aligning with Tesla’s ambitious future plans.
Musk’s financial success has been unparalleled, as he recently became the first person in history to surpass a $600 billion net worth. With the 2018 compensation plan reinstated, one of the most closely watched executive pay disputes in modern corporate history has finally come to a close.