Elon Musk has secured a decisive legal win after the Delaware Supreme Court reinstated his long-disputed Tesla compensation package.
The ruling restores a 2018 pay plan valued at approximately 56 billion dollars, ending months of intense legal uncertainty.
Judges overturned a 2024 decision that had previously cancelled the package, calling that earlier sanction excessive.
The court concluded that fully voiding the agreement ignored years of performance and measurable value creation at Tesla.
The compensation plan was highly unusual, containing no salary or cash bonus and relying entirely on share-based rewards.
Those shares were tied to ambitious industrial and financial targets that many observers initially viewed as unrealistic.
Between 2018 and 2024, Tesla evolved from an emerging electric vehicle maker into a dominant global manufacturer.
Over the same period, the company’s market capitalisation surged towards and beyond the one trillion dollar mark.
The Supreme Court found that Musk ultimately met every performance milestone outlined in the original agreement.
Judges stressed that governance failures should not automatically erase outcomes that delivered exceptional shareholder returns.
Despite the ruling, the court stopped short of fully clearing Tesla’s board of responsibility.
It acknowledged that the approval process for the 2018 package suffered from weak oversight and limited internal challenge.
The ruling noted that Musk held significant influence during deliberations, with directors offering little resistance.
Instead of cancelling the award, the court imposed symbolic damages of one dollar to reflect those shortcomings.
Financially, the decision allows Tesla to return around 303 million shares to Musk.
At current valuations, those shares are estimated to be worth roughly 150 billion dollars.
The outcome also impacts a newer incentive proposal designed to secure Musk’s long-term leadership.
That alternative plan involved up to 96 million additional shares, valued at around 29 billion dollars.
Shareholders had conditionally approved an even larger future scheme potentially worth up to one trillion dollars.
Under the terms agreed, that proposal will now be shelved following the reinstatement of the 2018 package.