Catenaa, Saturday, December 20, 2025- Elon Musk’s 2018 pay package from Tesla, once valued at $56 billion, was reinstated by the Delaware Supreme Court on Friday.
Nearly two years after a lower court struck down the compensation deal as “unfathomable”, the ruling overturned a decision that had prompted a furious backlash from Musk and damaged Delaware’s business-friendly reputation.
It assures Musk greater control over the company, which he has said is his main concern, even after shareholders recently approved a new pay package that could be worth $878 billion if Tesla meets certain targets.
The Supreme Court said a 2024 ruling that rescinded the pay package had been improper and inequitable to Musk.
The remedy of total rescission “leaves Musk uncompensated for his time and efforts over a period of six years,” the 49-page ruling issued on Friday stated.
The 2018 pay package is now worth about $139 billion based on the price of Tesla’s stock at the close of trading on Friday.
If Musk exercises all the stock options from the 2018 package, his stake in Tesla would grow from about 12.4% to 18.1% of an expanded share base.
The company is issuing shares tied to his new pay package, although he must earn them by hitting performance goals.
Lawyers who challenged the pay package said in a statement that they were considering their next steps and were “proud to have participated in the historic verdict below, calling to account the Tesla board and its largest stockholder for their breaches of fiduciary duty.”
The pay package was by far the largest ever until Tesla shareholders approved the new pay plan in November.
If Tesla’s appeal had failed, it could have triggered a $26 billion hit to profit over two years to account for the replacement stock-compensation package it had promised Musk, at today’s much higher stock price.
