In a decisive reversal that vindicates one of the most aggressive compensation structures in corporate history, the Delaware Supreme Court ruled on Friday to reinstate Elon Musk’s 2018 Tesla pay package. The decision overturns a January 2024 lower court ruling that had voided the grant, originally valued at $56 billion but now worth significantly more, as “unfathomable.”
Markets reacted immediately. Tesla (TSLA) shares held firm near $483 (+1%), while Dogecoin (DOGE), often a proxy for Musk’s liquidity and sentiment, climbed 5% to $0.13.
The Ruling: Shareholder Agency Restored
The core of the Supreme Court’s decision dismantled the Chancery Court’s argument that Tesla’s board was beholden to Musk and that shareholders were “uninformed.” The justices found that the 73% of disinterested shareholders who ratified the plan in 2018 exercised valid business judgment, effectively stating that sophisticated investors knew exactly what they were buying: high risk for exponential reward.
We reverse the Court of Chancery’s rescission remedy and award $1 in nominal damages.
This ruling closes a specific vulnerability for Musk, whose liquidity is heavily tied to Tesla equity. The lower court’s initial decision had threatened to claw back options that were contingent on Tesla hitting a $650 billion market cap, a milestone the EV maker shattered under Musk’s tenure.
Institutional & Crypto Implications
While the dispute was rooted in Delaware corporate law, the implications ripple directly into crypto markets. Musk’s restored access to this capital block removes a significant overhang on his personal balance sheet.
For the crypto sector, the logic is linear: Musk’s financial security correlates with his ability to fund X (formerly Twitter). With the payments license acquisition spree X has undertaken throughout 2024 and 2025, the reinstatement fuels speculation that the “Everything App” will accelerate its integration of peer-to-peer payments, where DOGE remains a favored candidate for native currency status.
The verdict also likely cools the immediate urgency of Musk’s crusade against Delaware as a corporate domicile, though Tesla shareholders already approved a move to Texas in mid-2024. The precedent set here is clear: if shareholders sign off on “unfathomable” pay for “unfathomable” performance, the courts will no longer stand in the way.
