Musk Wins Appeal to Restore $56B Tesla Pay Deal
The Delaware Supreme Court in the United States has restored Elon Musk’s 2018 Tesla compensation package, originally valued at about $56 billion, overturning an earlier ruling that had voided it. The decision, announced on 19 December 2025, allows Musk to potentially receive stock-based compensation tied to Tesla’s performance milestones achieved since 2018.
Court Ruling Reinstates Pay Plan
The court found that cancelling the pay package outright would leave Musk uncompensated for six years of leadership, as he did not draw a traditional salary and instead relied on performance-linked stock options. The 2018 plan granted him options to buy millions of Tesla shares at a favourable price if the company hit ambitious growth targets, which it ultimately did after its market value rose dramatically.
Background of Legal Dispute
A lower court had previously struck down the pay deal, saying the approval process was flawed and directors had conflicts of interest. That ruling had been controversial and sparked criticism about judicial interference in shareholder decisions. In response, Tesla moved its incorporation from Delaware to Texas and shareholders later approved a new pay plan.
Impact on Musk and Tesla
With the 2018 plan reinstated, Musk may exercise the stock options if performance conditions continue to be met, potentially boosting his stake in the company. Tesla’s share value increase since 2018 means the compensation could be worth significantly more than its original valuation.
