Delaware Supreme Court Reinstates Elon Musk's Tesla Pay Package Worth $56 Billion
The Delaware Supreme Court has reinstated Elon Musk's 2018 Tesla pay package valued at $56 billion, overturning a lower court ruling that had voided it as unfathomable. The reinstated compensation could be worth as much as about $139 billion today, according to the New York Times. Tesla shareholders had approved a stopgap measure at the November annual meeting in Austin to ensure Musk would receive the $56 billion regardless of the court ruling.
The court found a breach of fiduciary duty in the development of the original pay package but ruled that rescinding the entire package was inequitable, awarding nominal damages of $1 to the plaintiff. This ruling preserves Musk's compensation as pay for his time and effort over six years rather than cancelling it entirely.
Musk has publicly criticized Delaware's court system, including Chancellor Kathaleen McCormick, and subsequently relocated Tesla from Delaware to Texas. Both the 2018 compensation plan and other Tesla pay plans require Musk to meet ambitious goals related to product development and increasing Tesla's value to approximately $8.5 trillion in order to cash out. According to the New York Times, a new plan could potentially be worth $1 trillion to Musk within a decade.
