By Enyichukwu Enemanna
The Delaware Supreme Court on Friday cleared the way for Elon Musk to receive a long-contested $56 billion Tesla pay package, reversing an earlier judgment in the protracted legal battle.
The court ruling raised the Tesla CEO’s worth to $749 billion, Forbes’ billionaire index says, just days after he became the first person ever to surpass $600 billion in net worth on the heels of reports that his aerospace startup SpaceX was likely to go public.
A lower court had in 2024 struck out the pay package, saying the compensation deal was “unfathomable”. But the Supreme Court said the ruling that rescinded the pay package had been improper and inequitable to Musk.
The five-man panel of Supreme Court justices held that the lower court judgment by Chancellor Kathaleen McCormick of the state’s Court of Chancery was improper in ordering a rescission, the tossing out of Musk’s package in its entirety.
“It is undisputed that Musk fully performed under the 2018 grant, and Tesla and its stockholders were rewarded for his work,” the ruling said as it reversed the rescission.
Though approved by a majority of Tesla shareholders, the 2018 package ended up in court when Tesla shareholder Richard Tornetta challenged the award as excessive.
In a statement posted online Friday, attorneys representing Tesla shareholders said they were considering next steps.
The lower court struck down the award in January 2024 following a five-day trial, calling the process “deeply flawed.” The board proved vulnerable to manipulation by Musk, “the paradigmatic ‘Superstar CEO,’” wrote McCormick, who upheld her determination in December 2024 following an appeal.
But Tesla’s board has staunchly supported Musk throughout the legal saga, approving an “interim” compensation award in August worth about $29 billion for him and then unveiling a pay package worth as much as $1 trillion.
Tesla shareholders on November 6 easily approved the latest package, which is tied to a number of performance and valuation targets.
