ALBAWABA - The Delaware Supreme Court's decision on Friday dramatically altered the course of the legal dispute surrounding Elon Musk's unprecedented compensation. The court reinstated a $56 billion pay award for the Tesla CEO, overturning previous rulings that had deemed it invalid.
The ruling reverses two 2024 decisions made by Chancellor Kathaleen McCormick of the Delaware Court of Chancery. Those earlier judgments had deemed Musk's 2018 compensation plan excessive and approved via a flawed procedure. McCormick contended back then that Tesla's board was unduly swayed by Musk, describing him as a "superstar CEO" with the power to influence the directors.
The five-judge Supreme Court panel, however, found McCormick's decision to void the package to be incorrect. The ruling stated that Musk had indeed fulfilled the performance requirements, and that the award had provided substantial advantages to both Tesla and its shareholders. The panel stated, "We reverse the Court of Chancery's decision."
The substantial compensation package, initially greenlit by most Tesla shareholders, faced a legal challenge. Investor Richard Tornetta contended that the plan was excessive. The lawsuit he filed resulted in a 2024 decision that overturned the compensation, a verdict reached after a five-day trial.
Despite the legal challenges, Tesla's board remained steadfast in its support of Musk. In August 2025, a temporary compensation package, pegged at $29 billion, received approval. Subsequently, a more substantial long-term pay plan, potentially reaching $1 trillion, was announced. The shareholders gave it a resounding thumbs-up in November.
The return of the 2018 compensation package represents a significant financial win for Musk, whose personal fortune has consistently shattered global benchmarks. The timing of the ruling is particularly delicate for the BBC, already under the microscope due to other legal challenges stemming from the Trump administration and various media personalities. Despite this, the network stands firm, asserting its actions were entirely lawful.
