Tesla CEO Elon Musk received a record $56 billion payout in 2018 after a Delaware judge upheld a previous ruling that the compensation plan was improperly awarded. lost its bid to restore its remuneration package.
CNBC report In a significant setback for Tesla CEO Elon Musk, Chancellor Kathleen McCormick of the Delaware Court of Chancery has rejected Musk's $56 billion compensation plan, the largest in U.S. history for a public company executive. It upheld his January ruling invalidating the pay plan. The judge reaffirmed that there were “significant flaws” in the process that led to approval of the pay plan, including that Musk personally controlled Tesla and dictated compensation terms to the board, which failed to negotiate fairly. .
Breitbart News previously reported on a ruling in which a judge criticized Tesla's “self-driving process.”
McCormick asked in making the decision: “Was the world's richest person overpaid? So says the shareholder plaintiff in this representative lawsuit, who believes Tesla directors gave Elon Musk a performance-based stock compensation plan Alleges a breach of fiduciary duty.
Mr McCormick continued: “In the final analysis, Mr. Musk initiated the self-driving process, readjusting his speed and direction as he deemed appropriate along the way. This process came at an unreasonable cost. And through this lawsuit, plaintiffs are seeking a recall.” is requesting.”
Following the initial ruling in January, Tesla held a shareholder vote in June at its annual meeting in Austin, Texas, asking investors to “approve” Musk's 2018 CEO compensation plan. . Musk's lawyers relied on that vote to try to persuade the judge to overturn Musk's opinion after the trial. However, Finance Minister McCormick rejected this argument, saying, “Even if a shareholder vote had the effect of ratification, it cannot be done here.'' If courts accepted the practice of allowing losing parties to create new facts for the purpose of modifying judgments, litigation would continue endlessly. ”
As part of Monday's opinion, Mr. McCormick approved awarding $345 million in legal fees to lawyers who successfully sued on behalf of Tesla shareholders to invalidate Mr. Musk's pay plan. Bernstein, Litowitz, Berger & Grossman, attorneys representing the plaintiffs, expressed satisfaction with the ruling and thanked the Chancellor and his staff for their efforts in overseeing the complex litigation.
Despite legal setbacks, Musk's net worth has increased significantly in recent weeks. Since Donald Trump's election victory in November, Musk's wealth, excluding options attached to his pay package, has increased by more than $43 billion. Tesla shares rose 42% in the four weeks after the election, fueled by optimism that Musk's close relationship with the president-elect would lead to favorable policies for the company.
Musk's current holdings in Tesla stock are worth nearly $150 billion, not including SpaceX stock, based on Monday's closing price. This alone would put him among the richest individuals in the world. Equilar estimates that at current stock prices, Musk's 2018 package would have been worth $101.4 billion.
Following the January ruling, Musk criticized Delaware courts and suggested that companies should never incorporate in the state. Tesla subsequently held a shareholder vote to reincorporate in Texas, officially transferring its incorporated status to Texas. Musk also moved defense contractor SpaceX's state of incorporation from Delaware to Texas.
Tesla plans to appeal the ruling, as stated in Musk's post on social media platform X. In another X post, Musk called the ruling “absolute corruption.”
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Lucas Nolan is a reporter for Breitbart News, covering free speech and online censorship issues.
