Elon Musk to Appeal Reversal of $56 Billion Tesla Pay Package

Delaware Chancellor Kathaleen McCormick has approved an appeal from Elon Musk and Tesla's board of directors to reinstate the record-breaking $56 billion compensation package granted to Musk in 2018.

This decision initiates a 30-day window to file an appeal with the Delaware Supreme Court. Musk and Tesla's leadership plan to contest the January ruling, which found that they breached their obligations to shareholders.

The lawsuit was brought by Richard Tornetta, a minority shareholder who owns just nine Tesla shares. Tornetta argued that shareholders weren’t adequately informed about whether Musk’s performance justified such an enormous payout.

As Tesla's CEO and largest shareholder, Musk does not receive a conventional salary. Instead, his compensation is tied to performance metrics such as stock price and profitability.

In her ruling, McCormick described the pay package as unfathomably large and invalidated the payout despite it being approved by Tesla shareholders in a June vote.

The Delaware Supreme Court typically issues rulings within a year. Additionally, Tesla intends to appeal the court order mandating a $345 million payment in legal fees to Tornetta’s attorneys for the lawsuit challenging Musk’s compensation.