More than money: What Elon Musk's reinstated $139 billion pay package rally secures

In a landmark reversal, the Delaware Supreme Court on Friday, December 19, restored the 2018 compensation package for Tesla CEO Elon Musk.

The deal is now valued around $139 billion. The decision overturns a 2024 lower court ruling that had nullified the pay plan as “unfathomable.”

With this decision, a year-long battle that started when a shareholder owning just nine Tesla shares challenged the package.

In her 2024 decision, Delaware Chancery Court Chancellor Kathaleen McCormick found Tesla’s board had failed to prove the massive award was fair to shareholders, citing conflicts of interest and a lack of full disclosure.

However, the state’s highest court disagreed, stating in a 49-page opinion that completely rescinding the package was “inequitable” and “leaves Musk uncompensated for his time and efforts over a period of six years.”

The 2018 package grants Musk stock options to buy about 304 million Tesla shares at a steep discount if the company hit ambitious financial and operational milestones (all of which company has achieved).

The legal fight had significant repercussions. Musk, incensed by initial voiding of his pay, launched a fierce campaign against Delaware’s corporate legal system, calling it hostile to business and urging companies to incorporate elsewhere.

Various high-profile firms such as Coinbase and Roblox, resultantly moved their legal homes to states such as Texas and Nevada.

Musk celebrated the ruling on his social media platform X (formerly Twitter), posting that he was “vindicated.”

In after-hours trading, Tesla shares were slightly up.

The reinstatement of the 2018 package comes just weeks after Tesla shareholders approved a new, even larger compensation plan for Musk in November.

That package could be worth up to $878 billion if the company meets extraordinary growth targets over the next decade.

Lawyers for the shareholder who originally challenged the 2018 deal said they were “considering our next steps” and remained “proud to have participated in the historic verdict below.”

The Supreme Court’s decision solidifies Musk’s position as the world’s richest person as this title is largely built on his Tesla and SpaceX holdings.