Elon Musk finally has his 2018 Tesla pay package back. The Delaware Supreme Court has spoken. The saga that consumed years of litigation, untold judicial energy, and more Twitter commentary than any fiduciary duty case deserves is, at least formally, somewhat over.

But if anyone thinks Delaware can now move on, they’re misunderstanding what just happened. The Musk decision didn’t close a chapter, it opened several new ones about attorneys’ fees, judicial independence, and how Delaware plans to oversee corporate governance in an era when AI, superstar founders, and legislative impatience are all pulling in different directions.

The Supreme Court Put the Fire Out, Very Carefully

In reinstating Musk’s compensation package — now valued at approximately $139-$140 billion, significantly more than its original $56 billion value — the Delaware Supreme Court did something very Delaware. It resolved the dispute without torching doctrine and without humiliating the Court of Chancery.

Notably, the justices left intact Chancellor Kathaleen St. Jude McCormick’s core finding: Tesla’s board approval process was conflicted. What the court declined to do was keep the institutional drama going.

The clearest signal came not from the holding, but from the tone. The opinion openly acknowledges the toll this litigation took on the Chancery Court and on Chancellor McCormick personally.

But, to my surprise, instead of remanding attorneys’ fees for yet another round of decision-making, the court on its own slashed the $345 million award to no more than $54.5 million, which is an extraordinary move.

What makes this moment especially striking is how avoidable much of the surrounding turmoil was. As the debate over Musk’s compensation and Delaware’s supposed “anti-founder” turn intensified, I urged the Delaware Senate not to rush to intervene and to allow the Supreme Court to do what it has always done best: absorb the controversy, correct where necessary, and restore equilibrium.

That patience might have spared Delaware significant self-inflicted damage. The Supreme Court did exactly what many of us expected – and hoped – it would do: close the case decisively, protect the institutional legitimacy of the Court of Chancery, and recalibrate the outcome without rewriting fiduciary law or endorsing a founder-friendly backlash.

Instead, the Delaware legislature acted in the heat of the moment. Now the state finds itself defending new statutes, reopening constitutional questions, and fueling a narrative of instability that never needed to take hold.

Fees: The Real Plot Twist

If Musk’s pay package was the headline, attorneys’ fees were the surprise ending.

Delaware’s system of corporate governance runs on private enforcement. There is no SEC of fiduciary duty, and no regulator for conflicted boards. Instead, plaintiffs’ lawyers take on risk, front often enormous costs, and hope, sometimes years later, that the court agrees that the case mattered.

That system only works if the upside occasionally justifies the gamble.

The Supreme Court’s treatment of attorneys’ fees was surprising. Even for those who expected the justices to step in and restore institutional equilibrium, the scale and manner of the fee reduction were startling. Slashing the award so dramatically, without remand or additional fact-finding, raises hard questions about whether the result was necessary – or justified.

The court’s sharp reduction of fees in Musk sent a jolt through the plaintiffs’ bar. As SMU Professor Carliss Chatmanhas observed, the message may feel chilling: Even in a case involving conflicted governance, intense litigation, and undeniable systemic importance, fee recovery is deeply uncertain.

Penn Professor Jill Fisch has long warned that Delaware’s fee regime is already an all-or-nothing affair. When lawyers risk walking away with nothing, the system depends on meaningful rewards in the cases that succeed. Take that away, and the pipeline of difficult, high-risk cases starts to dry up.

Delaware may not intend to squash litigation. But incentives have a funny way of doing their work quietly.

Judicial Independence, Now With Legislative Cameos

All of this is unfolding just as the Delaware Supreme Court prepares to rule on a direct challenge to Senate Bill 2, which was drafted in response to complaints from company founders and controllers that the Court of Chancery had grown too friendly to minority shareholders.

Depending on whom you ask, S.B. 21 – the bill that resulted in reforms to Delaware corporate law – is either a modest clarification of controller doctrine or a not-so-subtle attempt to rein in judicial discretion.

What makes the Musk decision relevant isn’t Musk himself but the court’s posture. By preserving Chancellor McCormick’s findings while declining to pile on, the justices signaled a strong institutional instinct to protect the court, protect its independence, and de-escalate where possible.

That instinct may loom large in Rutledge v. Clearway Energy Group, where the court must decide how far the legislature can go in telling Chancery judges how to do their jobs.

The Cases That Keep Directors Up at Night

Most companies don’t see themselves in Musk or Moelis. They see themselves in Caremark.

Oversight claims, not controller pay packages, are what make directors nervous. And the case that may matter most for Delaware’s future isn’t about celebrity CEOs at all. It’s Blue Bell Creameries.

A trial scheduled to begin soon could be the first real test of Delaware’s modern oversight doctrine, born of a 2019 Supreme Court decision that cracked open Caremark claims once thought nearly impossible to win. One thing is sure, we are waiting to see how it’s going to affect corporate exits from Delaware.

Delaware’s Real Balancing Act

Delaware’s strength has never been about siding with managers or shareholders as a class. It’s been about judgment – expert judges, flexible standards, and a system that adapts without breaking.

The coming decisions, on attorneys’ fees, legislative intervention, and oversight liability, will test whether that strength still holds in a world of AI-powered lawyering, impatient founders, and increasingly political corporate debates. AI-powered lawyering is already transforming corporate litigation: Tasks that once consumed thousands of billable hours, such as discovery, drafting, benchmarking, and case strategy, can now be executed in days.

This shift challenges fee doctrines premised on scarcity of human labor and invites a deeper question: Should courts continue to reward effort, or instead focus on results and systemic value, when technology radically lowers the cost of legal production? The answer will shape not only fee awards, but also how aggressively boards, founders, and plaintiffs deploy the law as a governance tool.

Musk got his pay package back. Delaware got something else: a moment of reckoning.

Anat Alon-Beck is a visiting scholar at Harvard Law School and a professor at Case Western Reserve University School of Law.