Update, August 19, 2026: The December 19, 2025 opinion still stands as the end of the Delaware appeal on rescission. It did not bless the 2018 grant as entirely fair, and it did not rule on Tesla’s 2024 stockholder ratification vote. Tesla had already reincorporated in Texas and, in November 2025, stockholders approved a new performance package. Read the Skadden and Gibson Dunn case notes, not a victory-lap headline, for what the justices actually decided.
On December 19, 2025, the Delaware Supreme Court, in a per curiam opinion in In re Tesla, Inc. Derivative Litigation (No. 534, 2024), reversed the Court of Chancery’s order that had rescinded Elon Musk’s 2018 Tesla option grant. The Wall Street Journal reported the same day that the 2018 options were back. Musk posted one word on X: “Vindicated.”
The original Tesery copy called the ruling a unanimous vindication of Musk’s leadership and said the court voided Chancellor Kathaleen St. J. McCormick’s whole 2024 decision. Law-firm readouts of the opinion say the justices took a narrower path: rescission was an improper remedy. They said they had “varying views” on liability and did not decide entire fairness or the later ratification vote.
Key facts
- Court / date: Delaware Supreme Court, December 19, 2025, per curiam.
- What was reversed: Rescission of the 2018 CEO performance option package (the Tornetta derivative case).
- What was not decided: Whether the 2018 deal was entirely fair; what the 2024 Tesla stockholder ratification vote legally did.
- Fees: The trial court’s huge plaintiff-fee award (widely reported around $345 million) was cut back; the plaintiff was left with nominal damages ($1) plus a quantum meruit fee, per firm alerts.
- What this is not: A Texas court ruling, a new Tesla 10-K valuation of the grant, or a Robotaxi milestone.
Vindicated
— Elon Musk (@elonmusk) December 19, 2025
Why “reinstated” is true — and incomplete
Chancellor McCormick had thrown out the 2018 grant after a trial that found a conflicted process and inadequate disclosure. Tesla later moved to Texas and asked stockholders to ratify the same deal. The Supreme Court did not have to pick a winner on those liability findings to reverse. It held rescission was too extreme: you cannot put everyone back to 2018, and wiping the grant would leave Musk unpaid for years of work under the plan. That restores the options as a remedy holding. It is not the same as saying the Chancery court was wrong about the board.
Dollar headlines ($56 billion, $139 billion, $26 billion earnings hit) move with Tesla’s stock and with how accountants would have treated a voided grant. Cite a live price or a Tesla filing if you need a number. Do not freeze one magazine figure in the H1.
FAQ
Did Delaware say the 2018 package was fair?
No. The justices said they disagreed among themselves on liability and decided only the remedy.
Did the 2024 shareholder vote settle the case?
The Supreme Court did not decide that question.
Is Tesla still a Delaware company?
Tesla reincorporated in Texas while this appeal was pending. The 2018 grant was a Delaware-era Tesla deal.
For owners/shareholders: this is governance litigation, not an FSD software note. Option dilution and a new Texas award (November 2025) are the follow-on documents to read, not this recap’s adjectives.
Featured photo: Delaware State Capitol in Dover (file photo of the state government complex, not a courtroom still). Image via Wikimedia Commons.
Related: Shareholders approve the 2025 CEO award · Tesla files the 2025 package with the SEC · November 2025 vote: award, not a cash wire
