A compensation package awarded to Elon Musk by Tesla in 2018 — and invalidated by a court nearly two years ago — has been reinstated as of December 19.
The Delaware Supreme Court ruled to restore the pay package, overturning a lower court decision issued in January 2024. At the time, the judge described the award as an “unfathomable sum” and unfair to shareholders.
Under the 2018 agreement with shareholders, Musk was granted options to purchase 304 million Tesla shares through 2028, contingent on the company meeting a series of operational and market capitalization milestones. The stock options were structured in 12 tranches tied to performance targets.
When first approved in 2018, the package was valued at $56 billion. Based on Tesla’s closing share price on December 19, its value has since surged to approximately $139 billion.
The shares would further strengthen Musk’s control over Tesla — a priority for the CEO, even after shareholders recently voted in favor of a new compensation plan reportedly worth up to $1 trillion.
The Delaware Supreme Court said the lower court’s ruling had effectively deprived Elon Musk of compensation for six years of work and effort. During that period, Musk received no salary, relying solely on stock-based awards tied to Tesla’s performance.
“This is a win for Musk, as it accelerates his path to greater control,” said Gene Munster, managing partner at Deepwater Asset Management, an investor in Tesla.
Musk has already earned all of the stock options granted under the 2018 package. If fully exercised, his stake in the electric carmaker would rise from 12.4% to 18.1%. Writing on X, Musk said he had been “vindicated.”
Tesla has made clear this year that retaining its CEO is a top priority as the company pivots from being solely an electric vehicle manufacturer to focusing on autonomous driving technology and humanoid robots. In addition to the $1 trillion compensation plan approved by shareholders last month, Tesla announced in August that it would award Musk a new $29 billion stock grant if the 2018 package was not reinstated.
In a September filing, Tesla said it must compete with Musk’s other ventures for his attention. The company noted that much of the billionaire’s wealth is now tied to businesses outside Tesla, particularly aerospace firm SpaceX and artificial intelligence startup xAI. As those enterprises grow, Tesla faces the risk that Musk could prioritize them.
“The majority of Musk’s net worth is now derived from ventures outside Tesla. He has more attractive opportunities than ever,” the company said, arguing that the new compensation package is necessary to prevent the CEO from shifting his focus elsewhere.
According to Forbes, Musk is currently the world’s richest person, with a net worth of $679 billion — the first individual ever to surpass $600 billion in wealth.
