A legal dispute regarding the compensation package awarded to Elon Musk, CEO of Tesla, is ongoing as the court examines claims that the initially proposed remuneration plan was significantly inflated due to the surging value of Tesla's stock.

The original compensation plan was valued at approximately $2.6 billion; however, it escalated to an estimated $56 billion following a substantial increase in Tesla's share price by the time the court made its initial ruling. Current valuations suggest that, based on Monday's closing price, Musk's compensation could exceed $100 billion.

Earlier this year, the presiding judge determined that Musk had close ties with members of Tesla's board, which facilitated the negotiation of this generous compensation package. The court found that shareholders were not adequately informed about these relationships prior to the initial vote on the compensation agreement, which hindered their ability to make an informed decision. As a result, the judge ruled in favor of the plaintiff seeking to annul Musk's compensation agreement.

In June, Tesla shareholders voted to approve the substantial stock package again, yet this decision does not guarantee that Musk will prevail in court. Musk has publicly criticized the ruling and announced plans to appeal the decision. Tesla issued a statement asserting that the court's ruling is erroneous, and they intend to pursue an appeal.

Additionally, Musk expressed on social media platform X that the governance of shareholder votes should rest with the company's shareholders rather than judges. The appeals process may be initiated at the Delaware Supreme Court, with filings expected as early as this week; however, the appeal process could extend over the course of a year.

Following the court's initial ruling, Tesla's stock saw a decline of over two percent in after-hours trading, with shares dropping to around $349. Earlier in the year, when the initial judgment was issued, the stock was valued at under $200.

Tesla's stock performance has recently benefited from Musk's proximity to the incoming U.S. President, Donald Trump. Investors are optimistic regarding potential government regulations that could promote fully autonomous vehicles, which would be advantageous for Tesla's planned robotaxi service. As a result of these market developments, Tesla's market capitalization has once again surpassed $1.1 trillion.