A Delaware appeals court on Friday cleared the way for Elon Musk to receive his long-contested $56 billion Tesla pay package, overturning a previous judgment. The court ruled that Musk fully performed under the 2018 grant and that Tesla and its stockholders benefited from his work.
The decision reverses two 2024 rulings by Chancellor Kathaleen McCormick, who had invalidated the package, calling it excessive and flawed. Musk’s compensation was challenged by shareholder Richard Tornetta, who argued the award was unreasonably large despite board approval.
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The appeals panel said the rescission of Musk’s pay was improper, emphasizing that the CEO had met all grant conditions. Tesla’s board has consistently supported Musk, approving an interim award of $29 billion and a subsequent package potentially worth $1 trillion based on performance and valuation targets.
The 2018 package had been celebrated as historically large, though it has since been surpassed by Musk’s newer awards. Shareholders overwhelmingly approved the latest pay package in November, ensuring Musk remains the highest-paid executive in corporate history.
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Tesla shareholder attorneys said they are reviewing next steps after the ruling. The decision marks a major legal victory for Musk, reinforcing the board’s authority in approving executive compensation.