Overview
- In a unanimous per curiam ruling on December 19, 2025, the Delaware Supreme Court reversed the Court of Chancery’s rescission and reinstated Elon Musk’s 2018 compensation package.
- The justices held rescission was improper because the parties could not be restored to the status quo ante, noting Musk had performed and achieved the plan’s milestones over six years.
- The plaintiff received $1 in nominal damages, and the court set plaintiffs’ attorneys’ fees on a quantum meruit basis with a four-times lodestar, about $54.5 million, a sharp reduction from $345 million decided by the trial court.
- Addressing remedial burdens, the court said plaintiffs must prove entitlement to rescission or tailored relief and that defendants are not required to supply alternative remedies, distinguishing Valeant’s disgorgement context.
- The opinion did not reach controlling‑stockholder, fairness, or 2024 ratification issues, and it arrives alongside Tesla’s Texas reincorporation, a new award with anti‑double‑dip terms, and Delaware corporate‑law reforms facing a pending constitutional challenge.