Musk to receive ₹12 lakh crore salary from Tesla:Delaware Supreme Court reverses order, rules 2024 pay package cancellation ‘unfair’

Elon Musk, the world’s richest individual, has secured a significant legal win in the long-running dispute over his 2018 Tesla compensation package. On Friday, the Delaware Supreme Court overturned a lower court ruling that had struck down Musk’s $56 billion pay deal. With Tesla’s share price having surged since the package was approved, its current value is estimated at around $139 billion, or nearly ₹12 lakh crore. The earlier ruling, delivered almost two years ago, had described the compensation plan as “unimaginable” and blocked its implementation. The latest decision comes as a major relief for Musk. It also strengthens his hold over Tesla, something he has repeatedly said is his primary concern, as the compensation package would raise his stake in the company to about 18%. Canceling Musk’s Pay Package Was Unfair and Left Him Uncompensated: Court In its 49-page verdict, the Supreme Court ruled that scrapping Elon Musk’s compensation package in early 2024 was unfair and unjust. The court said that completely canceling the deal effectively left Musk without any compensation for six years of work and value creation at Tesla. Based on Tesla’s share price at Friday’s market close, the 2018 pay package is now valued at around $139 billion. Gene Munster, Managing Partner at Deepwater Asset Management, described the ruling as a major win, noting that it would allow Musk to consolidate control of the company more quickly. Tesla Stake to Rise to 18.1% If Musk exercises all the stock options granted under the 2018 package, his stake in Tesla would increase from about 12.4% to 18.1%. These shares, however, are tied to performance-based milestones that must be met. Tesla has not issued an immediate statement on the ruling, while Musk reacted on social media platform X, posting, “I was proven right.” What Was the 2018 Pay Package Dispute? In 2018, Tesla’s board approved a massive compensation plan for Musk, under which he would be eligible to buy nearly 304 million shares at a heavily discounted price if the company met ambitious market-cap and operational targets. Tesla later achieved all of these goals. Following shareholder approval, a lawsuit was filed by investor Richard Tornetta, who owned just nine Tesla shares. After a five-day trial, Delaware Judge Kathleen McCormick canceled the package in early 2024, citing concerns that Tesla’s directors were not fully independent and that key information had not been adequately disclosed to shareholders. ​