Tesla shares gain after court ruling over Musk pay package

Investing.com -- Tesla shares are up 1.1% in premarket trading on Monday after a Delaware Supreme Court ruling restored Elon Musk’s 2018 CEO compensation plan, ending a years-long legal battle over the record-setting award.

The court ruled that a lower court went too far when it ordered the $56 billion pay package to be rescinded, saying the remedy was too extreme.

The judges reversed the cancellation and awarded $1 in nominal damages, effectively reinstating the 2018 pay plan.

The decision resolves the closely watched case brought by Tesla shareholder Richard J. Tornetta, who had accused Musk and the board of breaching their fiduciary duties.

While the Supreme Court restored the pay package, it left intact other findings from the Court of Chancery, including conclusions about Musk’s influence over Tesla and flaws in the board’s approval process.

Legal experts believe the ruling closes the dispute over Musk’s 2018 compensation but does not undo broader governance criticisms.

After the original ruling, Tesla moved its incorporation out of Delaware and sought to reaffirm Musk’s pay through a second shareholder vote.

Investors later approved an even larger compensation package in November 2025, tied to aggressive performance milestones over the next decade.

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