Elon Musk’s $56 billion Tesla pay fight started Tuesday, March 11, 2025. His legal team says the judge who nixed his 2018 deal messed up bad.
“That counterintuitive result defies settled principles of Delaware law, sound corporate governance, and common sense,”
their appeal brief states. Musk and a few Tesla board members-some still around, some not-are hitting back at talk that the big pay screwed shareholders. They’re mad Delaware Chancery Court Judge Kathleen McCormick used this entire fairness standard to judge it.
What’s the entire fairness standard?
It’s a rule the Delaware Supreme Court pulls out for deals where a top dog might get too much- or the board’s got conflicts. Musk’s lawyers say McCormick slapped it on wrong here.
How it went down with McCormick
In January 2024, she killed Musk’s pay plan. Said it wasn’t fair to Tesla investors. The board was too cozy with Musk, she thought, and the company didn’t spill enough to shareholders before they voted yes in 2018.
Musk’s push
The appeal says McCormick got it off. They claim she figured Musk ran the pay talks himself—not true, they say. She also called normal board ties conflicts, they argue, and was too tough on what Tesla told shareholders before the vote.
Shareholders and one guy
Reuters notes McCormick’s call let Tesla shareholders sue easier. That’s how Richard Tornetta, with just nine shares in 2018, got his case rolling. He sued for Tesla, against its bosses, saying they failed.
Where it’s headed
Musk wants his pay back. Delaware Supreme Court’s up next—will they stick with McCormick or flip it? It’s still going.
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