Tesla drops Musk’s $29B ‘interim’ award after Delaware court restored larger pay package

In a significant corporate decision, Tesla has officially rescinded the interim compensation package valued at $29 billion that was awarded to CEO Elon Musk last year. This move follows a recent ruling by the Delaware Supreme Court that reinstated Musk's original $56 billion pay package from 2018. Initially granted in August 2025, the interim package was designed as a precautionary measure, anticipating potential challenges to Musk's appeal. Tesla had communicated to investors that the interim compensation would be nullified if Musk succeeded in his case. They emphasized their commitment to avoiding any 'double dip' scenario. Confirmation of the revocation came in Tesla's latest quarterly filing with the Securities and Exchange Commission, where the company disclosed that the decision was made on April 21, without participation from Musk or his brother, Kimbal, who also serves on the board. In the filing, Tesla reiterated its stance against any unnecessary windfall for Musk, aligning with the principle of not duplicating compensation. The original $56 billion package had faced scrutiny in court from a shareholder who argued that Musk had essentially negotiated his own compensation without adequate shareholder disclosure. This legal battle persisted for years, culminating in a 2024 ruling that sided with the plaintiff. Throughout the process, Tesla embarked on a public relations campaign to affirm that shareholders were not misled regarding the compensation structure. As the legal proceedings unfolded, Musk hinted at the possibility of leaving Tesla to pursue artificial intelligence ventures, prompting the board to create the $29 billion interim award as a safeguard. Additionally, they began crafting a much more expansive compensation plan potentially worth up to $1 trillion. The cancellation of the interim package does not affect Musk's eligibility for the $1 trillion compensation, which is contingent upon meeting various operational milestones, including delivering 20 million vehicles and launching a million robotaxis, while increasing Tesla's valuation to over $8 trillion within a decade. Interestingly, Tesla's filing indicated that the company is beginning to form its own projections regarding Musk's ability to meet these milestones. While it remains unclear which specific goals the company believes Musk will achieve, they reported an unrecognized stock-based compensation expense of nearly $10 billion for milestones deemed probable of accomplishment. Conversely, they also noted a substantial unrecognized expense ranging from $105.82 billion to $120.37 billion for milestones considered unlikely to be met. While Musk has a decade to fulfill the requirements tied to the $1 trillion package, many of these operational goals are seen as less ambitious than his previous commitments. Furthermore, Tesla's board has implemented restrictions on how and when Musk can sell shares from the restored 2018 compensation package, aiming to prevent any adverse effects on the company's stock value. These limitations echo those established in the new compensation plan, including requirements for Musk to remain in a leadership role through at least 2028 for the shares to vest, along with a five-year holding period.