Tesla and Musk’s attorneys, the court decided, “were unable to prove that the stockholder vote was fully informed because the proxy statement inaccurately described key directors as independent and misleadingly omitted details about the process.”

I'm guessing this was the key problem. Courts are very reluctant to set aside corporate decisions like CEO pay packages for soft reasons like general unfairness. But when you start getting into dishonesty and not meeting basic requirements, it's kind of forcing the judge's hand.

Full decision for those interested, it's long. I like this part:

Defendants also argue that Musk needed additional incentives to stay on at Tesla or he would spend more time at SpaceX, where he could fulfill his galactic ambitions to establish interplanetary travel, colonize Mars, and potentially earn more money in the meantime.858 That argument begs another question: if encouraging Musk to prioritize Tesla over his other ventures was so important, why not place guardrails on how much time or energy Musk had to put into Tesla?