Delaware Court Clears Path for Elon Musk’s $56 Billion Tesla Pay Package

NEW YORK: A Delaware appeals court on Friday paved the way for Tesla CEO Elon Musk to receive a long-disputed $56 billion compensation package, overturning earlier rulings that had struck down the award.

The Delaware Supreme Court reversed two decisions by Chancellor Kathaleen McCormick of the Court of Chancery, who had invalidated Musk’s 2018 pay package and ordered its cancellation. The five-judge panel ruled that the lower court acted improperly by rescinding the compensation in full, noting that Musk had fulfilled the terms of the agreement and that Tesla and its shareholders had benefited from his performance.

The court stated that Musk had fully delivered under the 2018 grant and that the rescission remedy was not justified, effectively reviving the historic compensation deal. The package, once considered the largest in corporate history, was originally approved by a majority of Tesla shareholders but was challenged in court by shareholder Richard Tornetta, who argued it was excessive.

Read more: Elon Musk Nears $1 Trillion, Becomes First to Hit $600 Billion

In January 2024, the Chancery Court struck down the package after a trial, describing the approval process as flawed and citing the Tesla board’s susceptibility to Musk’s influence. That decision was upheld later in 2024, before being overturned by the state’s highest court.

Throughout the legal battle, Tesla’s board continued to back Musk. In August 2025, it approved an interim compensation award valued at around $29 billion and later introduced a new performance-based pay package that could be worth up to $1 trillion. Tesla shareholders overwhelmingly approved the latest package in November, tying Musk’s compensation to ambitious performance and valuation targets.