Tesla is reportedly creating a special committee in a renewed attempt to secure Elon Musk's controversial £45 billion ($56 billion) compensation deal—months after a US court struck down the original 2018 agreement.
According to the New York Post, the electric vehicle giant's board is assembling a new group led by Chair Robyn Denholm and board member Kathleen Wilson-Thompson. Their goal: to explore alternative ways of rewarding the world's richest entrepreneur. The move comes after Musk warned he may leave Tesla if not granted greater control over the company.
Why Was Elon Musk's Pay Package Rejected?
In January 2024, Delaware Court of Chancery Judge Kathaleen McCormick invalidated Musk's pay deal. As Investopedia explained, the court accused the billionaire of 'engineering the landmark pay package'.
The judge found that Musk had held flawed negotiations with several Tesla board members who were not genuinely independent. As a result, the court ruled that the pay structure was unfair to shareholders—many of whom brought the lawsuit.
Judge McCormick described the package as 'unfathomable', questioning whether such a massive deal was necessary or whether retaining Musk was critical to achieving Tesla's goals. She also warned that allowing companies to override court rulings through shareholder votes could damage judicial accountability and open the door to constant litigation.
Could Elon Musk Still Get Paid?
The formation of Tesla's special committee suggests the board is not giving up. The group—still in early discussions—is weighing legal paths forward and exploring alternative compensation models that might pass judicial review.
According to the New York Post, if the committee formalises its proposals, it could lead to a court appeal or a restructured compensation plan for Musk.
What Happens Next in the Pay Battle?
If Tesla proceeds with an appeal and wins, Musk could finally receive his pay package, which would boost his ownership stake from 13% to over 20%.
The EV giant is currently trying to overturn the ruling via an appeal to the Delaware Supreme Court, while also supporting new state legislation that could impact executive compensation laws. If both efforts fail, the committee is expected to pursue other options to compensate Musk—potentially through revised stock grants.
Musk has made it clear: he wants more control. Without it, he's threatened to walk away. He argues that unless he secures a larger stake, he won't be able to shield Tesla from activist investors or those opposing its AI strategy.
The stakes are immense. For Elon Musk, it's about preserving his control over Tesla and pushing forward his long-term vision. For shareholders, it raises the critical question: is the company's most high-profile asset—its unpredictable but visionary founder—worth a £45 billion payday?
