Delaware's U-Turn: Musk's Massive Tesla Pay Package Back in Play

Restoring Billions and Reshaping Corporate Governance

Delaware's Supreme Court just flipped the script on one of the biggest executive pay battles in tech history, reinstating Elon Musk's 2018 Tesla compensation package worth around $56 billion. This ruling clears a major hurdle for Tesla's growth trajectory and signals a shift toward respecting shareholder votes in high-stakes deals.

Key Takeaways

• Delaware Supreme Court overturned a lower court's decision to cancel Musk's 2018 Tesla pay package, reinstating the full $56 billion in stock options after Musk met all performance milestones.

• The court emphasized that undoing the deal years after the work was done would be unfair, as shareholders had approved it twice through votes.

• Lawyers who challenged the package received about $54 million in fees based on hours worked, far less than the billions in stock they sought.

• This removes a long-standing uncertainty for Tesla investors, potentially stabilizing the stock and encouraging more aggressive innovation targets.

• The decision critiques unpredictable judicial rulings in Delaware, which could stem the exodus of businesses from the state and restore its reputation as a predictable hub for incorporation.