In 2024, a coalition of Tesla investors urged shareholders to reject a fresh vote ratifying Elon Musk’s 2018 CEO option award, commonly described at the time as a $56 billion pay package. The opponents argued that the board’s process and oversight remained troubling after a Delaware court ordered the award rescinded. Tesla asked shareholders to ratify it again, and 72% of disinterested voting shares ultimately supported ratification—but that vote did not itself resolve the separate court case.
What shareholders were asked to reject
The dispute concerned Musk’s 2018 CEO Performance Award, an option-based compensation package tied to Tesla performance milestones. After the Delaware Court of Chancery ordered the award rescinded in a January 30, 2024 opinion, Tesla’s 2024 proxy sought another shareholder vote to ratify it. The company’s position was that shareholders should approve the award again and that the court should revise its earlier ruling.
The vote was held at Tesla’s annual meeting on June 13, 2024. It was a vote on ratification of the 2018 award, not a vote that by itself overturned the court’s order.
Who urged investors to vote no—and why
A shareholder coalition that included SOC Investment Group, New York City Comptroller Brad Lander, and Amalgamated Bank campaigned against ratification. It also urged shareholders to vote against the reelection of directors Kimbal Musk and James Murdoch. The coalition’s May 2024 filing challenged the board’s independence and oversight and argued that the company’s new ratification process did not adequately address the concerns identified by the court. Those were the coalition’s advocacy claims, not findings that all investors shared.
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- Governance and process: The coalition questioned whether the board had independently overseen the compensation decision and whether its renewed vote process addressed the court’s concerns.
- Size of the award: Critics objected to the package’s scale. The Associated Press reported the coalition’s view that the award had an “excessiveness problem.”
- Musk’s attention: Opponents also questioned whether Musk’s attention was divided among his responsibilities.
How Tesla and other investors responded
Tesla’s case for ratification rested on the original shareholder mandate and the performance milestones associated with the award. Chair Robyn Denholm defended the package by pointing to Tesla’s targets and shareholder returns, according to the Associated Press. The company sought a renewed vote while maintaining that the court’s earlier decision should be revised.
Investors were not unanimous. Materials later filed in the Delaware Supreme Court record said that proxy advisers Institutional Shareholder Services and Glass Lewis recommended voting against ratification, while other major shareholders said they would vote in favor.
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| Position | What it emphasized |
|---|---|
| Shareholder coalition opposing ratification | Board independence and oversight, the process for seeking a new vote, the award’s size, and Musk’s divided attention. |
| Tesla and supporters | The original shareholder mandate, the award’s performance milestones, and Tesla’s results and shareholder returns. |
| Proxy advisers ISS and Glass Lewis | Recommended voting against the ratification proposal. |
| Other major shareholders | Some stated that they would vote in favor. |
What the 2024 vote did—and did not—settle
Tesla’s Form 10-Q for the quarter ended June 30, 2025 reported that 72% of disinterested voting shares supported ratification at the 2024 annual meeting. That figure describes the vote among disinterested voting shares, not a unanimous investor position.
Shareholder approval and judicial review were separate questions. The vote showed support for ratification among those shares; it did not, on its own, establish that the court’s rescission ruling had been reversed or determine the appeal.
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What Tesla reported about the court case in 2025
In its June 2025 Form 10-Q, Tesla said the Chancery Court denied the motion to revise its January 2024 opinion on December 2, 2024, and awarded $345 million in fees to plaintiff’s counsel. Tesla and the director defendants appealed. The filing said briefing was complete and no oral-argument date had been set as of the report.
This is the procedural status Tesla reported in that filing. It does not establish the result of a later appeal.
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Tesla’s separate interim award for Musk
In a later 2025 SEC-filed letter, Tesla said its board had approved an interim award of 96 million restricted shares. The letter described a two-year vesting period, a purchase price of $23.34 per share, and a requirement that Musk remain in a senior leadership role throughout vesting.
Tesla said the interim arrangement was designed to prevent Musk from retaining both awards. If the Delaware courts fully reinstated the 2018 award, the letter said the interim award would be forfeited or returned, or some portion of the 2018 award would be forfeited. The announcement described Tesla’s terms; it was not a final court ruling on the 2018 package.
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