In a major win for Elon Musk, the Delaware Supreme Court on Friday restored Tesla Chief's 2018 pay package which was worth $56 billion then. The Delaware SC
overturned the decision of a lower court that struck down the compensation deal as "unfathomable." Back then Musk had slammed the lower court's decision, saying it will damage the reputation of Delaware as business-friendly region. The 2018 Musk's pay package was by far the largest until Tesla shareholder came up with even bigger plan in November this year. The ruling clears the way for Musk to finally be paid for his work since 2018, when he turned Tesla from a struggling startup into one of the world’s most valuable companies. Also Read - Elon Musk's Net Worth Soars Past $600 Billion: Here’s A Breakdown Of What’s Powering His Record Fortune Under a pay package approved in 2018, Musk was granted the right to buy about 304 million Tesla shares at a heavily discounted price if the company met certain performance targets. Tesla achieved those targets. At the time, the company said the package could be worth up to $56 billion, but as Tesla’s share price surged, its value grew to nearly $120 billion by early November. The options account for roughly 9% of Tesla’s total shares, a Reuters report said. Despite shareholders approval, Musk could not collect his stock options in 2018 as 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 ruled that Tesla’s directors had conflicts of interest and that important information was not properly shared with shareholders before they voted on Musk’s pay plan. She ordered the 2018 compensation package to be cancelled. Musk criticised the decision, accusing Delaware judges of being activists hostile to technology founders. He urged companies to follow Tesla’s example and shift their legal base elsewhere. Firms such as Dropbox, Roblox, The Trade Desk and Coinbase later moved their legal headquarters to Nevada or Texas. But still, Delaware remains the most popular state for incorporation among US public companies. Tesla’s board has warned that Musk, the world’s richest person and also the head of SpaceX and artificial intelligence startup xAI, could leave the electric vehicle maker if he does not receive the pay he is seeking and a larger voting stake in the company. In November, Tesla shareholders approved a new pay package that could be worth up to $878 billion if the company meets ambitious targets linked to self-driving technology, a robotaxi network and sales of humanoid robots. Tesla has also taken steps to lower the risk of the new 2025 pay plan being challenged in court. The Austin-based company has reincorporated in Texas, where the law allows companies to require investors to own at least 3% of shares before filing a lawsuit over corporate governance issues. Such a stake would be worth about $30 billion, a level of ownership currently held only by Musk.
Elon Musk's Net Worth
Elon Musk’s net worth has surged to record levels, crossing the $500 billion mark for the first time in history. According to Forbes Real-Time Billionaires, his wealth now stands at $679.4 billion, cementing his position as the world’s richest person.
The anticipated $140 billion payout to Musk is expected to push his fortune even higher, further widening the gap between him and other global billionaires.
