Elon Musk Podcast Musk’s $56 Billion Pay Fight Reaches Final Verdict Stage
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Oct 16, 2025 Elon Musk's $56 billion compensation package faces scrutiny from the Delaware Supreme Court. The legality of Tesla's board decisions and whether they acted independently is under investigation. If the pay package is voided, it could set a precedent for CEO compensation across founder-led companies. Musk has hinted at drastic measures if he loses control, which raises tensions. The outcome may lead to broader changes in corporate governance practices, demanding more transparency and independence in board decisions.
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Board Independence Versus Shareholder Votes
- The Delaware Supreme Court is reviewing whether Tesla's board truly acted independently when approving Musk's $55.8B package.
- The core question is whether shareholder approval can excuse a compromised board process.
Performance Met But Process Flawed
- The 2018 package paid out after Musk met aggressive milestones and Tesla's value soared from ~$50B to >$750B.
- The lower court voided it, finding the board failed to negotiate at arm's length due to personal ties.
Legal Standard Shapes CEO Pay Outcomes
- Musk's team argues the judge applied 'entire fairness' instead of deferring under the business judgment rule.
- The appeal asks how much leeway founders with board influence should have when structuring pay.