Elon Musk's 2018 Tesla pay package musk be restored, Delaware supreme court rules

Core Viewpoint - The Delaware Supreme Court ruled that Elon Musk's 2018 CEO pay package from Tesla, valued at approximately $56 billion when vested, must be restored, concluding a lengthy legal battle over his compensation [2]. Group 1: Legal Proceedings - Richard J. Tornetta filed a derivative lawsuit in 2018, accusing Musk and the Tesla board of breaching their fiduciary duties [1]. - The Delaware Court of Chancery previously ruled in January 2024 that Musk's pay plan was improperly granted and ordered its rescission, citing flaws in the approval process by the Tesla board [3]. - Chancellor Kathaleen McCormick found that the board failed to disclose all material information to investors before the vote on the pay plan [3]. Group 2: Corporate Actions - Following the Tornetta ruling, Musk relocated Tesla's incorporation out of Delaware and criticized Chancellor McCormick publicly, urging other entrepreneurs to do the same [4]. - Tesla attempted to "ratify" the 2018 CEO pay plan by conducting a second vote with shareholders in 2024 [4]. Group 3: Legislative Context - A law firm representing Tesla drafted a bill to reform corporate law in Delaware, which was passed by the legislature in March 2023; had it been retroactive, it could have influenced the case's outcome [5].