KATHMANDU: The U.S. Delaware Supreme Court has restored Elon Musk’s 2018 Tesla CEO Compensation plan, ending a major legal dispute over executive pay.
The performance-based pay package was approved by Tesla shareholders in 2018. It was originally valued at about $55–56 billion. The plan linked Musk’s compensation to strict targets, including market value, revenue, and profit growth. Tesla later met all required milestones.
Based on Tesla’s share price at Friday’s close, the 2018 pay package is now valued at about $139 billion. If Musk exercises all the stock options under the plan, his ownership in Tesla would increase from around 12.4% to about 18.1% on a fully diluted share base.
In January 2024, the Delaware Court of Chancery canceled the pay deal. The lower court said Tesla’s board was too closely aligned with Musk and failed to properly safeguard shareholder interests. The ruling blocked Musk from receiving the stock options.
On December 19, 2025, the Delaware Supreme Court overturned that decision. The court said canceling the pay package was improper because Tesla achieved the agreed performance goals. The ruling fully restores the original compensation plan.
The Supreme Court’s decision closes a long-running legal battle and removes uncertainty over Musk’s compensation. The ruling may also influence how future executive pay packages are structured, with emphasis on disclosure and shareholder approval.
