Portugal Colonial - Musk wins US court appeal of $56 bn Tesla pay package

The decision by the Delaware Supreme Court rejects a pair of judgments by Chancellor Kathaleen McCormick of Delaware's Court of Chancery and sets the stage for another windfall for the world's richest person.

In a pair of 2024 rulings, McCormick invalidated the 2018 package, which once loomed as historically large but has since been eclipsed by the billionaire's most recent Tesla package.

The five-judge appeals panel determined that McCormick ruled improperly in ordering a rescission, the tossing out of Musk's package in its entirety.

"It is undisputed that Musk fully performed under the 2018 grant, and Tesla and its stockholders were rewarded for his work," the ruling said. "We reverse the Court of Chancer's rescission remedy."

Though approved by a majority of Tesla shareholders, the 2018 package ended up in court when Tesla shareholder Richard Tornetta challenged the award as excessive.

The court struck down the award in January 2024 following a five-day trial, calling the process "deeply flawed." The board proved vulnerable to manipulation by Musk, "the paradigmatic 'Superstar CEO," wrote McCormick, who upheld her determination in December 2024 following an appeal.

But Tesla's board has provided staunch support to Musk throughout the legal saga, approving in August 2025 an "interim" compensation award worth about $29 billion for Musk and then unveiling a pay package worth as much as $1 trillion.

Tesla shareholders on November 6 easily approved the latest package, which is tied to a number of performance and valuation targets.

A.Motta--PC