Tesla Makes Good on Its 'No Double Dipping' Promise
Tesla has pulled the plug on a $29 billion interim compensation award for CEO Elon Musk, following a Delaware court's decision to restore his original — and far larger — 2018 pay package worth $56 billion.
The move was widely anticipated. Tesla's board had signalled months ago that if Musk succeeded in his legal battle to revive the 2018 deal, the company would rescind the interim award rather than let him collect both. That moment has now arrived.
A Years-Long Legal Battle
The saga stretches back to 2022, when a group of Tesla shareholders filed suit challenging the 2018 compensation package — at the time the largest executive pay deal in corporate history. A Delaware Chancery Court judge voided the package in early 2024, ruling that Tesla's board had failed to properly disclose material information to shareholders before they approved it.
Tesla responded by putting the package to a fresh shareholder vote, which passed. The company then appealed the court's original ruling, arguing the ratification vote should count.
In the meantime, Tesla's board granted Musk the $29 billion interim award to keep him compensated while the legal process played out. Now that the Delaware Supreme Court has sided with Tesla and restored the original 2018 package, that stopgap is no longer needed.
What the $56 Billion Deal Actually Means
Musk's 2018 compensation plan was structured entirely in stock options tied to aggressive performance milestones — no base salary, no cash bonuses. The package only paid out if Tesla hit a series of increasingly ambitious targets for revenue, adjusted EBITDA, and market capitalization.
By most accounts, Tesla hit every one of those targets, making the deal one of the most lucrative — and arguably one of the most performance-driven — executive compensation arrangements ever designed.
Critics, however, argued the plan was approved through a flawed process controlled by Musk loyalists on the board, and that shareholders were not given a fair picture of how the deal was structured and negotiated.
Shareholder Discontent Hasn't Gone Away
Even with the Delaware court's restoration, the fight isn't entirely over. Some Tesla shareholders remain deeply uncomfortable with the sheer scale of Musk's compensation at a time when the company's stock has faced significant volatility and its CEO's public profile — particularly his political activities — has become a polarizing business risk.
Tesla's share price dropped sharply in early 2025 amid concerns that Musk's role in the U.S. Department of Government Efficiency was distracting from his duties at Tesla and damaging the brand in key markets, particularly Europe.
What Comes Next
With the interim $29 billion award off the table, Tesla's compensation picture is theoretically cleaner — one CEO, one (very large) package. But the underlying tensions between Musk's sprawling empire of companies and his obligations to Tesla shareholders are unlikely to disappear.
For now, Tesla says it's simply following through on its word. Whether that satisfies investors remains to be seen.
Source: TechCrunch
