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On Tuesday, March 11, 2025, Elon Musk’s appeal to restore his $56 billion Tesla pay package started with claims that the lower court judge who rescinded the 2018 compensation made a few mistakes in the case.<\/p>\n\n\n\n
“That counterintuitive result defies settled principles of Delaware law, sound corporate governance, and common sense,” said the opening appeal brief.<\/p>\n\n\n\n
Elon Musk, plus current and former Tesla directors, are defendants in this case. In their appeal brief, Musk and the Tesla directors<\/a> argue that Delaware Chancery Court Judge Kathleen McCormick incorrectly applied the entire fairness standard to assess the $56 billion pay package and make her ruling.<\/p>\n\n\n\n According to the Delaware Supreme Court, the entire fairness standard reviews corporate transactions, including those between corporations and their controlling stockholders. The entire fairness standard may apply when a controlling stockholder receives a non-ratable benefit, or there is a potential conflict of interest.<\/p>\n\n\n\n