Tesla faces a looming financial hit as the Delaware Supreme Court prepares to rule on Elon Musk’s 2018 pay package, a compensation deal so large it could erase years of future profits.
According to Reuters, if Tesla loses its appeal, the company will owe Musk a replacement stock award valued at $26 billion — an amount equal to more than half of Tesla’s cumulative net income since 2019.
Elon Musk isn’t the only soon-to-be trillionaire.@nirkaissar says it’s likely we’ll have as many as seven of them in the next few years 🎥 pic.twitter.com/kdnnBCJKMX
— Bloomberg Opinion (@opinion) November 19, 2025
The charge would be booked over two years and slash quarterly profits by $3.25 billion, surpassing Tesla’s earnings in most quarters over the past six years.
Even if Tesla prevails, Musk’s new trillion-dollar pay plan creates long-term earnings risks. Each performance milestone triggers billions in stock-based expenses at a time when Tesla’s profits are already weakening due to falling EV sales, lost subsidies and expensive bets on robotics.
Experts warn the board’s approach represents a massive wealth transfer benefiting Musk, while diluting shareholders and raising questions about fiduciary oversight.
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TIPP Staff
TIPP Staff
