Delaware Supreme Court Reinstates Elon Musk's 2018 Tesla Compensation Package

The Delaware Supreme Court has reinstated Elon Musk's 2018 Tesla compensation package, overturning a previous ruling that had rescinded the $56 billion pay deal. The court's decision, issued on December 19, 2025, found that rescinding the pay package would be "inequitable" and would leave Musk "uncompensated for his time and efforts over a period of six years."

In January 2024, Chancellor Kathaleen St. Jude McCormick had nullified the compensation plan, citing concerns over the Tesla board's close ties to Musk and the process by which the package was approved. This led Musk to relocate Tesla's incorporation from Delaware to Texas and prompted shareholders to reaffirm the pay package in a subsequent vote.

The Supreme Court's reversal not only reinstates Musk's compensation but also awards Tesla $1 in nominal damages. The ruling is expected to have significant implications for corporate governance and executive compensation practices.