The lawsuit accused the board of corporate waste and Musk, the company's chief executive officer and chairman, of unjust enrichment.
The lawsuit is seeking class action status.
Tesla said in a statement that the lawsuit "seeks to take the power from our shareholders and instead give it to plaintiffs lawyers. We will respond accordingly."
Musk received the support of the company's shareholders in March for a package that Tesla estimated to be worth $2.6 billion.
A Morgan Stanley analyst estimated the package could be worth up to $70 billion (£52.2 billion) if the company continues to grow quickly. While the award of the pay package cooled speculation that Musk might be planning to quit, it was also criticized for its unprecedented size.
Proxy advisory services ISS and Glass Lewis both had recommended shareholders reject the package.
"The new E. Musk compensation plan is so large it dwarfs the pay package of every other public company CEO," said the complaint by Richard Tornetta that was unsealed on Thursday in Delaware's Court of Chancery.
Tesla's statement noted that Musk gets nothing unless the company's market value doubles and continues to increase until it becomes one of the world's most valuable companies.
Much of the complaint describing the how the pay package is unfair was redacted.
The complaint said Tornetta obtained corporate records from Tesla as permitted under Delaware corporate law. Companies sometimes provide that information only if a shareholder signs a non-disclosure agreement.
The lawsuit was unsealed days after shareholders rejected a shareholder proposal to strip Musk of the chairman role.
That had represented the strongest challenge yet to Musk's grip on the Silicon Valley car maker, which also faces production setbacks and expectations by many analysts that it will need to raise new cash.
The case was assigned to Vice Chancellor Joseph Slights. In March, Slights ruled against Tesla's request for an early dismissal of a shareholder class action challenging the company's acquisition of SolarCity Corp, a renewable energy company.
The lawsuit alleged that Musk used his power over Tesla's board to buy SolarCity at a price that unfairly benefited Musk, a large shareholder in SolarCity.
The SolarCity deal closed in November 2016.
That case is proceeding to trial.
(Reporting by Tom Hals in Wilmington, Delaware; additional reporting by Paul Lienert)
By Tom Hals
