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Scan for outdated or missing drivers - takes under a minuteDriver Scan →Clear out junk files and repair common Windows errorsFree Scan →Fix the driver behind crashes, sound loss and screen glitchesFind Drivers →In May 2024, a coalition of Tesla investors urged shareholders to reject a vote to ratify Elon Musk’s 2018 stock-option award and oppose the reelection of directors Kimbal Musk and James Murdoch. The group framed its objections as a governance and board-oversight problem. The legal position has since changed: in December 2025, the Delaware Supreme Court reversed the trial court’s rescission remedy and reinstated the award.
What the shareholder group wanted investors to do
In a May 20, 2024 letter, eight investor and labor organizations called on Tesla shareholders to vote against ratifying Musk’s 2018 compensation award and against the reelection of Kimbal Musk and James Murdoch at the company’s June 13 annual meeting. The signatories were Amalgamated Bank, AkademikerPension, Nordea Asset Management, New York City Comptroller Brad Lander, SHARE, SOC Investment Group, UNISON, and United Church Funds.
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The letter said Tesla faced a “material governance failure” requiring urgent action. That was the coalition’s characterization, not a court finding that the board was dysfunctional. Its objections focused on director independence, oversight of Musk and his other commitments, and the process used to consider a new shareholder vote on the award.
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Why the coalition opposed ratification
Board independence and oversight
The signatories argued that Tesla’s board had not adequately addressed concerns about its independence from Musk or its oversight of his management and competing commitments. They also questioned whether shareholders could rely on the board’s process to assess the award fairly.
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The committee’s review
The coalition criticized the Special Committee’s ratification review as too narrow and too hurried. It argued that the review did not resolve the underlying governance concerns and questioned whether another vote could expose Tesla to further litigation.
Whether the award incentivized future performance
The letter also challenged the award’s value as a forward-looking incentive. In the coalition’s view, asking shareholders to approve a 2018 award did not answer the longer-term questions of how Tesla should retain Musk or set his future compensation.
These were advocacy arguments made by the letter’s signatories. They should be distinguished from the separate findings made by the courts in the litigation over the award.
What “$46 billion” meant
The $46 billion figure was a contemporaneous, market-linked valuation used in coverage of the 2024 dispute; it was not a cash salary or a fixed payment. Because the options’ value moved with Tesla’s share price and the measurement date, it should not be treated as a timeless value for the award.
The Delaware Court of Chancery’s January 2024 opinion described the award’s maximum potential value as $55.8 billion and its grant-date fair value as $2.6 billion. Those are distinct valuation measures, and neither is interchangeable with the $46 billion contemporaneous headline figure.
The award comprised 12 option tranches. Each tranche represented 1% of Tesla’s total outstanding shares as of January 21, 2018, and was subject to market-capitalization and operating or revenue milestones. That structure is why describing the award simply as a $46 billion paycheck is misleading.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How Tesla defended the award
Tesla’s 2024 proxy urged shareholders to ratify the award. The company described it as performance-based compensation and emphasized that Musk had achieved the plan’s targets. Tesla also presented the Special Committee’s review as support for bringing the award back to shareholders.
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The company’s position and the coalition’s objections addressed overlapping questions but reached different conclusions:
| Question | Shareholder coalition’s argument | Tesla’s position |
|---|---|---|
| Board process and oversight | The letter said concerns about independence and oversight remained unresolved and criticized the committee’s review as too narrow and hurried. | Tesla’s proxy presented the Special Committee process as support for ratification. |
| Purpose and performance | The signatories questioned whether ratifying the old award would provide an effective incentive for future performance or settle longer-term compensation questions. | Tesla described the award as performance-based and said Musk had achieved its targets. |
Both positions were made by interested parties: the coalition was urging a particular vote, while Tesla’s proxy advocated ratification. The court’s findings in the underlying case were a separate matter.
What the Delaware courts decided
January 2024: trial court ordered rescission
In its January 30, 2024 post-trial opinion in Tornetta v. Musk, the Delaware Court of Chancery found that the defendants had not proved the award entirely fair under the applicable standard and ordered rescission. The opinion discussed Musk’s influence over Tesla and the approval process, relationships between directors, a lack of meaningful negotiation, and shortcomings in shareholder disclosure. Chancellor Kathaleen St. Jude McCormick wrote that “the process leading to the approval of Musk’s compensation plan was deeply flawed.”
December 2025: Delaware Supreme Court reinstated the award
On December 19, 2025, the Delaware Supreme Court reversed the Chancery Court’s rescission remedy and reinstated the 2018 award. That later appellate decision changes the award’s current legal status: it is not accurate to describe the award as still voided solely on the basis of the January 2024 trial-court ruling.
How to understand the 2024 campaign now
The coalition’s letter remains a record of what those investors urged Tesla shareholders to do before the June 2024 meeting and why they said they were concerned. It is not the same thing as the court’s legal analysis, and the Supreme Court’s later decision means the 2024 trial-level rescission is not the final word on the award.
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