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In May 2024, a coalition of Tesla investors urged shareholders to reject a vote ratifying Elon Musk’s 2018 stock-option award and oppose the reelection of directors Kimbal Musk and James Murdoch. The group said its objections were about board oversight and the review process as well as compensation. The “$46B” figure was a time-specific valuation of the award, not a cash salary. The award was later reinstated by the Delaware Supreme Court in December 2025.
What did the shareholder group want investors to vote against?
In a May 20, 2024 letter, Amalgamated Bank, AkademikerPension, Nordea Asset Management, New York City Comptroller Brad Lander, SHARE, SOC Investment Group, UNISON and United Church Funds urged Tesla shareholders to vote against ratifying Musk’s 2018 award and against the reelection of Kimbal Musk and James Murdoch at the company’s June 13 annual meeting.
The letter characterized the situation as a governance problem, saying, “In short, Tesla is suffering from a material governance failure which requires our urgent attention and action.” That was the signatories’ advocacy position, not an independent audit or a finding by a court.
Why did the coalition oppose ratification?
- Board oversight: The signatories argued Tesla had not resolved concerns about board independence, oversight of management or Musk’s competing commitments.
- The review process: They criticized the award’s review by a single-member special committee as too narrow and too hurried, and said the process did not answer their broader governance concerns.
- Uncertainty about ratification: The letter questioned whether another shareholder vote could prevent further litigation.
- Future incentives: The group argued that ratifying an award tied to past performance would not necessarily provide a meaningful incentive for Musk’s future work, or settle longer-term questions about leadership and compensation.
How did Tesla and the coalition differ?
Tesla’s 2024 definitive proxy statement urged shareholders to ratify the award. The following table summarizes the competing advocacy positions; neither side’s description should be mistaken for a neutral assessment.
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| Issue | Shareholder coalition’s position | Tesla’s position |
|---|---|---|
| Board and oversight | The group said concerns about board independence, management oversight and Musk’s other commitments remained unresolved. | The company presented the Special Committee’s review as supporting a renewed shareholder vote. |
| Review and ratification | The signatories said the committee review was too narrow and hurried, and questioned whether ratification would end litigation. | Tesla’s proxy urged ratification and described the process leading to the renewed vote. |
| Compensation rationale | The group questioned whether the old award was an effective incentive for future performance and said a vote would not answer broader leadership and compensation questions. | Tesla characterized the plan as performance-based compensation and said Musk had achieved its targets. |
What did “$46B” mean?
The headline figure referred to a contemporaneous estimate of the award’s value during the 2024 debate. It was not a fixed cash payment or salary. The award’s market-linked value varied with Tesla’s share price and the measurement date. The Delaware Court of Chancery used two different measures in its 2024 opinion:
| Figure | What it describes | Source and qualification |
|---|---|---|
| $46 billion | A contemporaneous valuation used in coverage of the 2024 shareholder campaign. | Associated Press, May 21, 2024; a date-specific market valuation, not a cash award or the court’s maximum-potential figure. |
| $55.8 billion | The award’s maximum potential value. | Delaware Court of Chancery, January 30, 2024 opinion; a maximum-potential value, not the grant-date fair value. |
| $2.6 billion | The award’s grant-date fair value. | Delaware Court of Chancery, January 30, 2024 opinion; a separate valuation measure from the maximum potential value. |
The 2018 plan contained 12 option tranches. According to the Chancery Court’s 2024 opinion, each tranche represented 1% of Tesla’s total outstanding shares as of January 21, 2018, and was subject to market-capitalization and operating or revenue milestones. Those terms help explain why headline estimates and formal valuation measures were not interchangeable.
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What did the courts decide, and what is the award’s status?
In Tornetta v. Musk, the Delaware Court of Chancery’s January 30, 2024 post-trial opinion found that the defendants had not established that the award was entirely fair under the applicable standard. The court discussed Musk’s influence over Tesla and the approval process, directors’ relationships, the lack of meaningful negotiation and shortcomings in shareholder disclosure. It entered judgment for the plaintiff and ordered rescission. Chancellor Kathaleen St. Jude McCormick wrote, “The process leading to the approval of Musk’s compensation plan was deeply flawed.”
That was the trial court’s ruling at the time of the 2024 campaign. On December 19, 2025, the Delaware Supreme Court reversed the rescission remedy and reinstated the award. The 2024 coalition’s letter remains a record of what those investors urged before the June 2024 vote; it should not be described as reflecting the award’s current legal status.
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