In a significant reversal, the Delaware Supreme Court has reinstated a controversial $55 billion compensation package for Elon Musk that was originally granted by Tesla in 2018. This decision comes after the court found errors in a prior ruling made by Chancellor Kathaleen St. Jude McCormick, who in January 2024 had rescinded the package due to allegations of undue influence from Musk over the board.
The reinstatement not only boosts Musk’s wealth, estimated at $679 billion, but also reaffirms his position amid ongoing tensions with Tesla's governance. Following McCormick’s ruling, Musk made the decision to move Tesla’s headquarters from Delaware to Texas, prompting the board to negotiate with shareholders to reaffirm the original pay structure.
Additionally, Tesla recently secured shareholder approval for a new pay package that could potentially provide Musk with $1 trillion if he successfully increases the company’s market value from $1.6 trillion to $8.5 trillion over the next decade. The 2018 pay package had initially been seen as ambitious, reflecting a time when Tesla's market value was between $50 billion and $75 billion as it struggled with production issues.