Elon Musk’s $56 billion pay package for Tesla blocked again by Delaware judge | World News
Tesla CEO Elon Musk’s compensation package of $56 billion has been blocked again by a Delaware judge despite the shareholders of the EV company voting to reinstate the pay package in June.
Musk’s pay package was earlier rescinded in January by the same judge, Chancellor Kathaleen McCormick of the Court of Chancery, who called it excessive. It also surprised the investors and now Musk’s future at the world’s most valued carmaker remains uncertain.
The $56 billion compensation for Musk has now become $101 billion based on Tesla’s closing share price on Monday, and it is made up of 303 million Tesla stock options, reported CNN.
A Delaware judge just overruled a supermajority of shareholders who own Tesla and who voted twice to pay @elonmusk what he’s worth.
The court’s decision is wrong, and we’re going to appeal.
This ruling, if not overturned, means that judges and plaintiffs’ lawyers run Delaware…
— Tesla (@Tesla) December 2, 2024
In January, Judge McCormick ruled in favour of one of the shareholders in the suit who had argued that “Musk and the Tesla board bore the burden of proving that the compensation plan was fair, and they failed to meet their burden.”
Tesla opposed the verdict by the judge and posted on X, “A Delaware judge just overruled a supermajority of shareholders who own Tesla and who voted twice to pay Elon Musk what he’s worth. The court’s decision is wrong, and we’re going to appeal. This ruling, if not overturned, means that judges and plaintiffs’ lawyers run Delaware companies rather than their rightful owners – the shareholders.”
Tesla and Musk can appeal against the verdict in the Delaware Supreme Court as and when the final order by the judge comes out. However, the appeal could take a year to play out, reported Reuters.
Tesla in its court filings argued that the judge should acknowledge the voting held in June by the shareholders of the company, who voted in favour of the pay package for Musk.
Judge McCormick said that Tesla’s board was not entitled to hit a “reset” for Musk’s compensation. “Were the court to condone the practice of allowing defeated parties to create new facts for the purpose of revising judgments, lawsuits would become interminable,” she said.
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