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How much will Tesla pay Musk?
Delaware Supreme Court to rule on Musk's pay

How much will Tesla pay Musk?

Oct 15, 2025
05:01 pm

What's the story

The Delaware Supreme Court is set to hear arguments in a long-running legal battle over Tesla CEO Elon Musk's unprecedented compensation package. The deal, which was approved by shareholders in 2018, promised Musk more shares of Tesla stock based on the company's performance. At the time, it was estimated that if all goals were met, Musk could earn up to $55.8 billion from this deal.

Package value

Package could be worth over $100 billion

The exact worth of the 2018 pay package depends on when and how you count it, given Tesla's volatile share price. However, as of mid-October 2025, with Tesla stock at $429.24 per share, the package could be worth well over $100 billion. This would make it one of the largest paydays ever offered to a CEO of a publicly traded company.

Legal challenge

Lawsuit filed by Tesla shareholder Richard Tornetta

In 2018, Tesla shareholder Richard Tornetta sued Musk, Tesla, and its board of directors. He claimed that the board members violated their fiduciary duty by approving a pay package that gave too much power to Musk over his own compensation. Tornetta also alleged that shareholders were not fully informed about the board members' personal ties to Musk and their influence on the pay proposal when they voted to approve it.

Court defense

Tesla lawyers defend Musk's pay package in court

Tesla's lawyers have defended the pay package in court, arguing that it was approved by shareholders with full knowledge of its financial terms. They also stressed that the compensation was tied to performance, as Tesla stock performed extraordinarily well under Musk's leadership. Some Tesla shareholders have even filed briefs supporting this position, asserting they were fully informed when voting for the pay package.

Court ruling

Chancery Court ruled in favor of Tornetta

Delaware's Chancery Court sided with Tornetta, finding the "unfathomable sum" given to Musk was excessive. The court ordered Tesla to create a new compensation package to replace it. However, instead of doing so, Tesla put the same pay package up for a second vote by shareholders in 2024, and it was approved again. This decision was also rejected by Judge Kathaleen McCormick, who ruled that re-voting on the same plan wasn't equivalent to creating a new one.

Appeal process

Appeal to Delaware State Supreme Court

In March, Musk and the board appealed McCormick's ruling to Delaware's State Supreme Court. The justices will now consider whether the pay package was an extraordinary move reflecting undue influence or inadequately informed shareholders, or a properly conducted business decision. If it was the latter, courts generally defer to corporate boards and shareholders.

Current status

Musk's stake in Tesla has allowed him to profit immensely

Even without the 2018 pay package, Musk's large stake in Tesla has allowed him to profit from the skyrocketing value of Tesla shares. He currently owns about 13% of the electric car company and recently bought another billion dollars' worth of shares. This summer, Tesla's board voted to give Musk another $29 billion worth of shares as an "interim" compensation package.