Elon Musk is set to receive his 2018 Tesla compensation package worth $55.8 billion after a ruling by the Delaware Supreme Court.
On Friday, the court overturned a 2024 decision by the Delaware Chancery Court, where Judge Kathaleen McCormick had invalidated the package following a shareholder lawsuit. That ruling had argued the deal was excessive and improperly approved. The Supreme Court disagreed, stating that canceling the agreement was “inequitable” because it left Musk uncompensated for six years of work tied to Tesla’s growth milestones.
The court emphasized that rescinding a contract is an extreme measure and should only be used when clearly justified, concluding that the lower court had erred in voiding the deal.
The decision comes as Tesla shareholders have already approved a new, performance-based pay package for Musk that could be worth up to $1 trillion if the company meets ambitious targets, including large-scale robotaxi deployment. Tesla has not yet commented on how the restored 2018 package affects the newer plan.
Musk has repeatedly criticized Delaware since the original ruling, urging companies to leave the state. In 2024, both Tesla and SpaceX moved their incorporations from Delaware to Texas. While some major firms and investors, including Andreessen Horowitz, have also questioned Delaware’s legal environment, state officials say data still shows Delaware remains the world’s leading hub for corporate incorporation.