Business
Tesla Asks Delaware Court to Reinstate Musk’s $50 Billion Pay Plan
By Jake Beardslee · October 16, 2025
Legal Showdown over $50 Billion Compensation
The Delaware Supreme Court convened on October 15 to hear Tesla’s appeal over a 2023 Chancery Court ruling that invalidated CEO Elon Musk’s $50 billion pay package. Chancellor Kathaleen McCormick previously ruled the plan stemmed from a process that failed to fully inform shareholders and was influenced by board members aligned with Musk. Saul Loeb-Pool via Imagn Images
Musks Campaign Against Delaware
The ruling sparked a public backlash from Musk, who lashed out on social media and began advocating for companies to move their legal registrations out of Delaware. While only a few billion-dollar firms have done so, the controversy has reshaped debate over Delaware’s corporate dominance and legal standards. Musk did not attend Tuesday’s hearing. Jack Gruber / USA TODAY NETWORK via Imagn Images
Tesla's Argument: "Most Informed Shareholder Vote in Delaware History"
Tesla’s attorneys urged the state’s highest court to overturn either McCormick’s original decision or her rejection of a subsequent shareholder vote to reapprove the same compensation plan. Jeffrey Wall, counsel for Tesla, told the court that the second vote was “the most informed shareholder vote in Delaware history.”Wall argued that shareholders knowingly accepted the deal, even if certain fiduciary breaches were found. “We are not saying shareholders cleansed the breach, only that they accepted the result of the transaction,” Wall said. KATRIN BOLOVTSOVA / Pexels
Challenging the Remedy
Tesla’s lawyers contended that McCormick’s chosen remedy—that the pay plan be rescinded—was legally unsound. They argued such a reversal was impractical given Tesla’s massive growth, noting that Musk’s time and effort could not be restored. Instead, they said any breach warranted only “nominal” damages. Justice Karen Valihura pressed attorneys to cite precedent for “equitably rescinding” an executive’s pay years after work was performed.Gregory Varallo, representing the plaintiffs, said there was precedent and defended McCormick’s approach as legally consistent. “What makes it truly extraordinary,” Varallo said, “is it addresses the largest pay package in human history, awarded to the richest man on earth, who is also one of the most powerful men on earth.” PD-US / Wikimedia
