Buckle up, folks—Elon Musk just clinched a $56 billion win in Delaware’s top court!
The Delaware Supreme Court overturned a lower court’s ruling on Friday, reinstating Musk’s staggering 2018 Tesla CEO pay package in a move that feels like a triumph for innovation over petty grievances, Breitbart reported.
Let’s roll back to 2018, when Tesla’s board designed an unprecedented pay plan for Musk with 12 milestone-driven stock tranches.
After its approval, Musk surged to become the world’s wealthiest, now boasting a net worth of about $679.4 billion according to Forbes’ real-time list.
Shareholder Richard J. Tornetta challenged this in the Tornetta v. Musk case, alleging Musk and Tesla’s board breached fiduciary duties.
The Delaware Court of Chancery sided with Tornetta in January 2024, with Chancellor Kathaleen McCormick calling the approval process “deeply flawed” due to poor investor disclosures.
McCormick opined, “Was the richest person in the world overpaid?”
That’s a question loaded with resentment—shouldn’t shareholders, thrilled with Tesla’s growth under Musk, define what’s “overpaid”?
She further stated, “In the final analysis, Musk launched a self-driving process, recalibrating the speed and direction along the way as he saw fit.”
The Chancery Court canceled the package in 2024, prompting Musk to relocate Tesla’s incorporation out of Delaware while urging other innovators to follow.
But the Delaware Supreme Court reversed this on Friday, criticizing the lower court’s remedy as overly harsh and arguing Tesla deserved a chance to set fair pay.
While the 2018 plan is restored, some lower court findings remain unaddressed, per Columbia Law School professor Dorothy Lund.
Tesla didn’t stand still, holding a second vote in 2024 to “ratify” the original 2018 deal, showing most investors still back Musk.
At their Austin, Texas, meeting in 2024, shareholders also approved a new pay plan worth up to $1 trillion, with 75 percent of voting shares in favor, potentially raising Musk’s ownership from 13 percent to 25 percent.
This saga pits bold leadership against those eager to shackle success, with the Supreme Court’s ruling a welcome stand for rewarding risk over punishing prosperity.
