Elon Musk’s already stratospheric fortune just got another legal boost, along with a symbolic slap on the wrist.
The Delaware Supreme Court has reinstated Musk’s controversial 2018 Tesla compensation package, originally valued at $56 billion and now worth roughly $140 billion thanks to Tesla’s soaring share price. In doing so, the court overturned a 2024 ruling that had voided the deal over governance concerns.
The twist? Musk was ordered to pay $1 in nominal damages and cover legal fees, a token penalty acknowledging procedural flaws while restoring the record-breaking payout in full.
The court ruled that rescinding the package in its entirety was inequitable, noting that Musk had already met all performance targets tied to the award and that Tesla shareholders benefited accordingly. “It is undisputed that Musk fully performed under the 2018 grant,” the judges wrote.
The reinstated deal grants Musk options to buy about 304 million Tesla shares, potentially increasing his stake from 12.4% to over 18%. Musk called the ruling a vindication after previously accusing Delaware courts of judicial activism.
The decision also highlights a shift in corporate power dynamics. Tesla has since reincorporated in Texas, where shareholder lawsuits require a 3% ownership stake, a threshold currently met only by Musk himself. Future pay packages, including one that could be worth up to $1 trillion if Tesla hits long-term targets, are now far less vulnerable to legal challenges.
In short: Musk gets his payday back, Delaware gets its reputation bruised, and corporate governance just entered a new, more founder-friendly era, with a $1 fine serving as the court’s quiet footnote.
