Elon Musk’s $56 billion Tesla pay battle reaches final stage in Delaware court
Elon Musk’s legal team will appear before the Delaware Supreme Court on Wednesday to seek the reinstatement of his $56 billion Tesla pay package, nearly two years after a lower court voided it, calling it unfair to shareholders.
The January 2024 ruling by Chancellor Kathaleen McCormick found that Tesla’s board lacked independence from Musk when it approved his 2018 compensation plan and that shareholders had not received full information before voting for it, News.Az reports, citing Reuters.
The appeal’s outcome could reshape Delaware’s reputation as the go-to state for corporate law. Several firms — including Tesla, Dropbox, and Andreessen Horowitz — have already moved their legal bases to Texas or Nevada after what critics dubbed “Dexit.”
If Musk’s appeal fails, he could still gain tens of billions of dollars under a new compensation plan approved by Tesla in August. That plan aims to keep Musk focused on leading the company’s transition toward robotics and autonomous driving.
Meanwhile, Tesla’s board has proposed a $1 trillion compensation framework to reaffirm confidence in Musk, despite recent challenges from Chinese electric vehicle rivals and a slowdown in global EV demand.
The five-judge panel will also consider whether Tesla must pay $345 million in legal fees to attorneys representing shareholder Richard Tornetta, who initially sued to block the 2018 deal. A decision is expected in the coming months.
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