An American court in Delaware has ruled to reinstate a $56 billion stock package for Tesla CEO Elon Musk, reversing a previous decision that stripped the world's richest man of these payouts. The Delaware Supreme Court overturned two prior rulings by Chancellor Kathaleen McCormick, paving the way for Musk to receive an unexpected windfall. McCormick had invalidated Musk's 2018 compensation package in two separate rulings in 2024, a deal that was unprecedented at the time due to its massive value. However, a five-judge appellate panel concluded that McCormick erred by canceling Musk's pay package, stating in its decision, "There is no dispute that Musk fully performed his work under the 2018 plan, and Tesla and its shareholders received their bargain for his work." The court's decision affirmed, "We vacate the Court of Chancery's decision." Despite majority shareholder approval for Musk's 2018 compensation, the case reached court after Tesla shareholder Richard Tornetta challenged the payouts as excessive. In a statement released online Friday, lawyers representing Tesla shareholders said they are considering their next steps. The Court of Chancery voided the pay package in January 2024 following a five-day trial that found the process for awarding the funds "riddled with defects." McCormick upheld her decision in December 2024 after an appeal, stating that Tesla's board had proven it was susceptible to manipulation by Musk, the "ideal CEO and superstar." Throughout the legal battle, Tesla's board strongly supported Musk, first approving "interim" compensation of about $29 billion in August 2025, and later unveiling a new stock package valued at a trillion dollars. On November 6, Tesla shareholders easily approved the latest package, which is tied to a number of performance and evaluation goals.
