<div id="readability-page-1"><div id="ArticleBody-InlineImage-108168278"><div><div><p>Elon Musk, CEO of SpaceX and Tesla, attends the Viva Technology conference at the Porte de Versailles exhibition center in Paris on June 16, 2023.</p><p>Gonzalo Fuentes | Reuters</p></div></div></div><div><p>Elon Musk's 2018 CEO pay package from <span id="RegularArticle-QuoteInBody-2">Tesla<span><span id="-WatchlistDropdown"></span></span></span>, worth some $56 billion when it vested, must be restored, the Delaware Supreme Court ruled Friday.</p><p>The decision likely ends the years-long fight over Musk's record-setting compensation. </p><p>Musk's 2018 CEO pay package from Tesla, comprised of 12 milestone-based tranches of stock, was unprecedented at the time it was proposed. After it was granted, the pay plan made Musk the wealthiest individual in the world.</p><p>A shareholder named Richard J. Tornetta sued, filing a derivative action in 2018, accusing Musk and the Tesla board of a breach of their fiduciary duties. </p></div><div><p>Delaware's business-specialized Court of Chancery decided in January 2024 that the pay plan was improperly granted and ordered it to be rescinded.</p><p>In her decision, Chancellor Kathaleen McCormick found that Musk &#34;controlled Tesla,&#34; and that the process leading to the board's approval of his 2018 pay plan was &#34;deeply flawed.&#34; </p><p>Among other things, she found the Tesla board did not disclose all the material information they should have to investors before asking them to vote on and approve the plan.</p><p>After the Tornetta ruling, Musk moved Tesla's site of incorporation out of Delaware, bashed McCormick by name in posts on his social network X, formerly Twitter, where he has tens of millions of followers, and called for other entrepreneurs to re-incorporate outside of the state.</p><p>Tesla also attempted to &#34;ratify&#34; the 2018 CEO pay plan by holding a second vote with shareholders in 2024. </p><p>As CNBC previously reported, a law firm that currently represents Tesla in this appeal penned a bill to overhaul corporate law in Delaware earlier this year. </p><p>The bill was passed by the Delaware legislature in March, and if it had applied retroactively, it could have affected the outcome of this case.</p><p><em><strong>This is a developing story. Please check back for updates.</strong></em></p></div></div>

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<p>The Delaware Supreme Court has ruled that Elon Musk's 2018 Tesla CEO pay package, valued at $56 billion, must be restored. This decision concludes a lengthy legal battle initiated by shareholder Richard J. Tornetta, who accused Musk and the Tesla board of breaching fiduciary duties. The court found the original approval process flawed, but the Supreme Court's ruling reinstates the compensation.</p>

- The Delaware Supreme Court ruled that Elon Musk's 2018 CEO pay package from Tesla, valued at $56 billion, must be restored, concluding a lengthy legal battle.  
- Shareholder Richard J. Tornetta accused Musk and the Tesla board of breaching fiduciary duties, leading to a lower court's finding that the pay plan approval process was flawed and lacked necessary disclosures.  
- Following the ruling, Musk criticized the court's Chancellor and moved Tesla's incorporation out of Delaware while seeking to ratify the pay plan with a shareholder vote in 2024.

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