The Delaware Supreme Court scheduled oral arguments for Oct. 15 in Dover, Del., in Musk and Tesla’s appeal of a trial court’s decision striking down the CEO’s $56 billion compensation plan. The high court’s full five-member panel will hear the case.
The Delaware Chancery Court in December rejected Musk’s attempt to revive the pay deal through a second shareholder vote. Chancellor Kathaleen St. J. McCormick found that the Tesla directors’ consideration of the plan was riddled with conflicts of interest, and that the company hadn’t properly disclosed all its details to shareholders.
Musk has publicly attacked McCormick ever since—recently calling her “the activist who is cosplaying as a judge in a Halloween costume.” Tesla, Musk, and a group of shareholders have appealed McCormick’s decision, including a $345 million award in legal fees for the attorneys representing the investor behind the litigation.
That shareholder, Richard Tornetta, contends Delaware law doesn’t support the claim that Tesla’s second shareholder vote ratified the board’s approval of Musk’s pay package.
The dispute has fueled debate over the role of Delaware’s elite business court in the state’s dominance among the Fortune 500. In March, the governor signed a law aimed at persuading high-profile companies to stay in Delaware following Musk’s move of Tesla to Texas after losing the pay deal case. The state’s high court also will be reviewing those statutory changes that lowered judge-made guardrails around insider conflicts of interest.
The case is In re Tesla Inc. Derivative Litig., Del., No. 534,2024, 8/12/25.
(Adds new four paragraphs with additional background on the case.)
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