Tesla CEO Elon Musk loses bid to reinstate $56 Billion pay package

A Delaware judge upholds decision voiding Elon Musk’s 2018 $56 billion pay package, with Tesla planning to appeal.

Tesla CEO Elon Musk faced a legal defeat on Monday as a Delaware judge upheld a previous ruling that voided his 2018 pay package, valued at approximately $56 billion.

The ruling came after Chancellor Kathaleen McCormick found that Musk had improperly influenced the terms of his own compensation. She deemed the process through which the pay plan was approved as “deeply flawed” and criticized the board for failing to negotiate fairly.

The 2018 pay package was one of the largest ever granted to a public company executive in U.S. history, with Musk set to receive the massive sum based on the performance of Tesla’s stock. Despite the court's ruling, Tesla announced plans to appeal the decision, with Musk himself calling the ruling "absolute corruption" on his social media platform.

In an effort to overturn the decision, Tesla held a shareholder vote in June 2024, asking investors to ratify Musk's pay plan. However, McCormick ruled on Monday that even a stockholder vote could not reverse the court’s findings. She emphasized that allowing new facts to be introduced after a decision had been made would lead to endless litigation.

In addition to her ruling, McCormick approved a $345 million attorney fee award for the law firm representing Tesla shareholders who successfully sued to void Musk’s compensation plan.

Despite the legal setback, Musk’s wealth has surged in recent weeks. Tesla's stock price has increased by 42% following the U.S. election, boosting Musk's net worth by more than $43 billion. His Tesla stock alone is valued at nearly $150 billion, solidifying his place among the world's wealthiest individuals.