Delaware High Court Narrows Tesla Pay Remedies, Slashes Attorneys’ Fees

Overview

• In a December 19, 2025 ruling, the Delaware Supreme Court reversed the Chancery Court’s rescission of Elon Musk’s 2018 compensation package and awarded $1 in nominal damages.
• The justices limited their review to remedies, leaving questions about controlling‑stockholder status, board process, and disclosure unresolved.
• The court held that restoring the status quo ante was impossible because Musk had already met the award’s milestones, and it confirmed that plaintiffs bore the burden to justify rescission.
• Attorneys’ fees tied to the Musk grant were recalculated on a quantum meruit basis, dropping from $345 million to about $54.5 million.
• In a separate director‑pay case, the court cut the fee award to $70.9 million from $176 million while keeping settlement terms that require returning up to $735 million in stock and options and foregoing about $184 million in pay.