In December 2024, a Delaware judge refused to revise the judgment that had rescinded Elon Musk’s 2018 Tesla CEO pay award, despite a later shareholder vote in favor of it. That was not the final outcome: the Delaware Supreme Court reversed the rescission remedy in December 2025, and Tesla reported in 2026 that Musk exercised about 304 million options under the restored award.
What the December 2024 ruling did—and did not do
The December 2024 decision was a procedural ruling, not a new trial of whether Tesla’s 2018 pay award was fair. In January 2024, the Delaware Court of Chancery had entered judgment for Tesla shareholder Richard Tornetta and rescinded the award after concluding that the defendants had not shown it was entirely fair. Tesla shareholders voted again on the award in June 2024. Chancellor Kathaleen McCormick then denied the defendants’ request to revise the earlier judgment based on that vote. The court found that the post-trial vote did not provide grounds to change its prior judgment, according to the Associated Press’s contemporaneous account.
So the 2024 headline was about the judge declining to undo the earlier rescission through a second shareholder vote. It did not mean Musk had just been ordered to repay $101 billion in cash.
How the case and award changed over time
| Date | Development | What it meant |
|---|---|---|
| January 2024 | The Delaware Court of Chancery ruled for Tornetta and rescinded the 2018 award. | The court concluded the defendants had not established that the award was entirely fair. (Court of Chancery post-trial opinion.) |
| June 2024 | Tesla shareholders voted again on the award. | The vote became the basis for the defendants’ request to revise the judgment. (Associated Press.) |
| December 2024 | The Court of Chancery denied that request. | The later vote did not persuade the court to revise its post-trial judgment. (Associated Press.) |
| December 19, 2025 | The Delaware Supreme Court reversed the rescission remedy. | This appellate decision changed the award’s legal status. (Delaware Supreme Court opinion; Tesla 2026 Form 10-Q.) |
| March 18, 2026 | The Court of Chancery entered a final order implementing the appellate reversal. | Tesla’s 2026 Form 10-Q reports this date. |
| Second quarter of 2026 | Musk exercised approximately 304.0 million options under the restored award. | Tesla reported that he elected to net settle the exercise price; the resulting restricted shares carry service and holding conditions. (Tesla 2026 Form 10-Q for the quarter ended June 30, 2026.) |
What the 2018 award actually was
The award was a performance-based stock-option grant, not a cash salary. It had 12 tranches, each requiring Tesla to meet both a market-capitalization milestone and an operational milestone based on revenue or adjusted EBITDA. The market-capitalization hurdles began at $100 billion and rose in $50 billion increments through $650 billion. Each completed tranche entitled Musk to options to buy shares equal to 1% of Tesla common stock outstanding as of January 19, 2018. The grant expired after ten years. These mechanics are described in the Court of Chancery opinion.
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Because the award consisted of options, its estimated value moved with Tesla’s share price. The Associated Press reported that Equilar estimated it at $101.4 billion using Tesla’s closing share price on December 2, 2024. That was a dated estimate of the options’ value at that market price—not a stable present-day valuation, and not $101.4 billion paid to Musk in cash.
What Tesla reported after the appellate decision
Tesla’s Form 10-Q for the quarter ended June 30, 2026 says Musk exercised approximately 304.0 million options under the restored 2018 award during that quarter and elected to net settle the exercise price. The filing says the resulting restricted shares are subject to continued service through January 19, 2028 and a five-year holding period after vesting.
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The filing also says that in April 2026 Tesla’s board approved an implementation agreement and determined that restoring the 2018 award triggered forfeiture of an interim award. Tesla described that arrangement as preventing a “no double dip.” These are implementation terms reported by Tesla; they do not change the fact that the $101.4 billion figure was a December 2024 estimate, not a current value.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Keep the separate director-pay case distinct
A different Tesla derivative case concerned compensation for non-employee directors, not Musk’s 2018 CEO award. Tesla’s filing says the Delaware Supreme Court affirmed approval of the director-compensation settlement on January 30, 2026, while reducing the plaintiffs’ counsel fee award from approximately $176 million to $71 million. Those fee figures belong to that separate case and should not be confused with Musk’s option grant.
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