Overview

• Elon Musk has launched an appeal to the Delaware Supreme Court seeking to reinstate his $56 billion performance-based pay package from Tesla, which was voided by the Chancery Court in 2024.
• The Chancery Court ruled that Musk improperly influenced Tesla’s board during negotiations and failed to disclose key relationships, making the package invalid under Delaware corporate law.
• Tesla shareholders approved the pay package twice, but the court maintained its decision, citing concerns over fairness and governance standards.
• Musk has threatened to move Tesla and other companies out of Delaware in protest, sparking a trend of corporations reconsidering their incorporation in the state, referred to as 'DExit.'
• Delaware lawmakers are considering legal reforms to address mounting corporate dissatisfaction, though these changes would not retroactively impact Musk’s case.