Elon Musk wins appeal to restore $56B Tesla pay deal that was called ‘unfathomable'

Core Viewpoint - The Delaware Supreme Court restored Elon Musk's 2018 pay package from Tesla, which was initially valued at $56 billion, after a lower court had previously invalidated it, impacting Musk's compensation and Delaware's business reputation [1][3]. Group 1: Pay Package Details - The 2018 pay deal allowed Musk to acquire approximately 304 million Tesla shares at a discounted price contingent on the company achieving specific milestones, which it successfully met [4]. - Initially estimated to be worth $56 billion in 2018, the value of the pay package increased to around $120 billion by early November due to the rise in Tesla's stock price [4]. Group 2: Legal and Corporate Implications - Musk did not collect his stock options after a lawsuit from a minor shareholder led to a court ruling that deemed Tesla's directors conflicted and misled shareholders during the approval process of the pay plan [5]. - Following the court ruling, Musk criticized Delaware judges for being biased against tech founders and suggested that companies should consider relocating their legal bases to states like Texas or Nevada, although Delaware remains the preferred state for U.S. public companies [6]. Group 3: Future Compensation and Corporate Strategy - Tesla's board has indicated that Musk may leave the company if he does not receive the desired compensation and increased voting power, with a new pay package approved in November potentially worth $878 billion contingent on achieving ambitious targets [9]. - To mitigate the risk of future legal challenges regarding compensation packages, Tesla has incorporated in Texas, which imposes a requirement for investors to own at least 3% of the company's stock before initiating lawsuits related to corporate law violations [10].