Headlines
Musk wins appeal that restores 2018 Tesla pay deal now worth about $139 billion
Published by Global Banking & Finance Review®
Posted on December 19, 2025
3 min readLast updated: January 20, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on December 19, 2025
3 min readLast updated: January 20, 2026
Elon Musk's 2018 Tesla pay package, now worth $139 billion, was restored by the Delaware Supreme Court, overturning a previous rescission.
By Tom Hals
WILMINGTON, Delaware, Dec 19 (Reuters) - Elon Musk's 2018 pay package from Tesla, once worth $56 billion, was restored by the Delaware Supreme Court on Friday, two years after a lower court struck down the compensation deal as "unfathomable."
The ruling overturns a decision that had prompted a furious backlash from Musk and damaged Delaware's business-friendly reputation.
The court said a 2024 ruling that rescinded the pay package had been improper and inequitable to Musk.
The remedy of total rescission "leaves Musk uncompensated for his time and efforts over a period of six years," the 49-page ruling issued on Friday stated.
The 2018 pay package is now worth about $139 billion based on the price of Tesla's stock at the close of trading on Friday.
Tesla shares were up less than 1% in after-hours trading following the ruling.
Tesla did not immediately respond to a request for comment. Musk posted on X that he was "vindicated."
The pay package was by far the largest ever until Tesla shareholders approved a new, even larger pay plan in November.
The ruling means that Musk can finally get paid for his work since 2018, when he transformed Tesla from a struggling startup to one of the world's most valuable companies. If Tesla’s appeal had failed, it could have triggered a $26 billion hit to profit over two years to account for the replacement stock-compensation package it had promised Musk – at today’s much higher stock price.
The 2018 pay deal provided Musk options to acquire about 304 million Tesla shares at a deeply discounted price if the company hit various milestones, which it did. The options represent around 9% of Tesla's outstanding stock.
Musk never collected his stock options because soon after shareholders approved the 2018 compensation, the board was sued by Richard Tornetta, an investor with just nine Tesla shares.
In 2024, after a five-day trial, Delaware Judge Kathaleen McCormick concluded that Tesla's directors were conflicted and key facts were hidden from shareholders when they voted to approve the plan. She ordered that the 2018 plan be rescinded.
Musk accused Delaware judges of being activists who are hostile to tech founders and he urged businesses to follow Tesla and reincorporate elsewhere. Dropbox, Roblox, Trade Desk and Coinbase were among the handful of large companies that moved their legal homes to Nevada or Texas. However, Delaware remains by far the most popular legal home for U.S. public companies.
Tesla's board had warned that Musk, the world's richest person who also leads the SpaceX rocket venture and artificial intelligence startup xAI, could leave the electric car company if he did not get the pay he wanted and an increase in his voting power.
In November, shareholders approved a new pay package that could be worth $878 billion if Tesla meets targets for self-driving vehicles, a robotaxi network and sales of humanoid robots.
Tesla has taken steps to reduce the risk that a shareholder could tie up the 2025 package in the courts.
The Austin-based company is now incorporated in Texas, which allows Tesla to require that any investor or group of investors must own 3% of the company stock before suing for an alleged corporate law violation. A stake of that size would be worth around $30 billion and Musk is the only individual with that much stock.
(Reporting by Tom Hals in Wilmington, Delaware, and Jan Wolfe in Washington; Additional reporting by Chris Kirkham in Los Angeles and Abhirup Roy in San Francisco;Editing by Rod Nickel, Alexia Garamfalvi and Matthew Lewis)
A compensation package is a collection of salary and benefits offered to an employee. It can include base salary, bonuses, stock options, and other perks.
Corporate governance refers to the systems and processes that direct and control a company. It encompasses the mechanisms through which companies, and those in control, are held accountable.
Stock options are contracts that give an employee the right to buy a certain number of shares of the company's stock at a predetermined price within a specific time frame.
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