After a Delaware court on Tuesday struck down Elon Musk’s $56 billion salary, Tesla’s CEO and board of directors must find a way to negotiate a replacement contract, which will not be easy, Reuters reported.

Elon MuskPhoto: Mandel Ngan / AFP / Profimedia Images

The ruling emboldens investors who have for years raised concerns about the independence of Tesla’s board of directors. This could be a turning point for Musk, who recently said he was loathe to turn Tesla into an AI leader unless his control increased with a new pay package.

“This throws Tesla into complete disarray from an executive standpoint,” said Tesla shareholder Ross Gerber, who said the court’s ruling essentially requires new independent board members to oversee the CEO.

Musk hasn’t said what he’ll do, though the call is almost certain. Tesla shares fell 2.2% on Wednesday.

First, Musk will have to give back what he got if the ruling stands. He fulfilled the terms of the 2018 contract and received 12 tranches of options worth about $51 billion.

However, the grant of the option “remains unused and undisturbed,” the court’s decision says, so it may not be difficult to refuse to earn it.

The decision to replace the kit with something else will be a difficult process, as it is unclear who will be negotiating on Tesla’s side. The judge who fired said the huge pay package was unfair to shareholders and questioned the board’s independence.

In 2022, Equilar estimated that Musk’s package was roughly six times the combined pay of the 200 highest-paid executives in 2021. According to Forbes, Musk was the second richest person in the world with a fortune of 184 billion dollars.