Tesla’s 2018 pay plan for Elon Musk was reinstated by the Delaware Supreme Court on December 19, 2025, after years of litigation and a second shareholder vote. The often-cited “$56 billion” was an estimate of the stock options’ potential value—not a fixed cash payment—and it changed with Tesla’s share price. Supporters campaigned publicly around the 2024 vote, but that campaign was separate from the court’s legal decisions.
What the $56 billion figure meant
The disputed compensation was Tesla’s 2018 CEO Performance Award, a performance-based stock-option plan approved by the board and shareholders in 2018. Its headline value depended on Tesla’s stock price; it was not a $56 billion cash salary or a payment of that amount made at once. The Associated Press described the package as having an approximate potential value of $56 billion on December 2, 2024, and noted that the value had changed over time.
The distinction matters: a potential valuation attached to options is not the same as cash received. The award’s scale made it a corporate-governance dispute as well as a debate about executive compensation.
How the case and shareholder votes unfolded
| Date | What happened | Why it matters |
|---|---|---|
| 2018 | Tesla’s board approved the CEO Performance Award, and shareholders approved it. | This was the original authorization of the stock-option plan. |
| January 30, 2024 | After a trial in stockholder Richard Tornetta’s derivative lawsuit, the Delaware Court of Chancery ordered the award rescinded. | The court ruled against the award following a challenge to the board’s approval process, disclosures, and fairness. |
| June 2024 | Tesla held a second shareholder vote. Its 2024 annual report later recorded that 72% of disinterested shares voted to ratify the award. | This was a new vote after the trial court’s decision; it did not itself erase that judgment. |
| December 2, 2024 | The Court of Chancery denied the defendants’ motion to revise its ruling and awarded Tornetta’s counsel $345 million in fees. | The court did not change its decision in response to the second vote. |
| December 19, 2025 | The Delaware Supreme Court reversed the rescission remedy, reinstated the 2018 plan, and awarded nominal damages. | This later appellate decision controls the plan’s status. |
The 72% figure is Tesla’s reported result among disinterested shares, not a claim that 72% of all shares or all shareholders supported the award. Tesla’s Form 10-K reports the vote and the 2024 court proceedings; it predates the Supreme Court’s 2025 decision.
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Why the second vote did not end the case
Tornetta challenged the award through a derivative lawsuit, a case brought by a stockholder on the company’s behalf. The dispute was not simply whether shareholders favored Musk’s compensation. It concerned how the board approved the award, what shareholders were told, and whether the arrangement was fair.
After the trial court ordered rescission, Tesla sought another shareholder vote and later asked the Court of Chancery to revise its ruling. Chancellor Kathaleen St. Jude McCormick rejected the defendants’ ratification argument in December 2024. As reported by the Associated Press, she wrote that the proxy statement contained “multiple, material misstatements” and said the defendants’ ratification theories went against settled law. The 2024 vote was therefore part of the dispute, not a substitute for the court’s review.
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The Delaware Supreme Court later changed the outcome on appeal: it reversed rescission and reinstated the 2018 plan, while awarding nominal damages. That is the final result reflected in the supplied court chronology; it should not be confused with the trial court’s earlier ruling or Tesla’s description of its legal position in 2025.
What Tesla’s supporters did—and did not do
Tesla’s 2024 proxy campaign drew visible activity from Musk supporters, including public posts and videos. Tesla also filed materials with the SEC connected to content Musk had engaged with, as part of its effort to show that shareholders were informed ahead of the vote. The phrase “fans waged a battle” describes that public campaign; it is not a court finding that fans determined the vote or changed the legal result.
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The campaign and the legal case addressed different questions. Public advocacy could encourage shareholders to vote, while the courts considered the challenged board process, disclosures, ratification argument, and appropriate remedy. The vote result records shareholder action; it does not, by itself, explain the Supreme Court’s later appellate disposition.
A separate interim award disclosed in 2025
While the 2018 plan remained in litigation, Tesla disclosed a separate interim restricted-stock arrangement in a May 2025 SEC filing. The company said it had approved 96 million restricted shares with a $23.34 purchase price per share and a two-year vesting term. The arrangement was conditional on antitrust regulatory approval and continued service in a senior leadership role.
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Tesla said the interim award could not be retained on top of a fully reinstated 2018 award. These are terms Tesla disclosed in May 2025; they do not establish that the conditions have since been satisfied or describe any later change to the arrangement.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Do not confuse the award case with Tesla’s director-pay litigation
A separate Delaware Supreme Court opinion issued January 30, 2026 addressed litigation over compensation for Tesla non-employee directors. That is a different case from Tornetta’s challenge to Musk’s CEO Performance Award and does not replace the December 2025 appellate ruling on the 2018 plan.
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