A Delaware judge ruled Monday that Tesla CEO Elon Musk is still entitled to $56 billion in compensation, even though the electric car company's shareholders voted in favor of reinstatement. The court ruled that there was no such thing.
The ruling by Court of Chancery Judge Kathleen McCormick follows a January ruling that struck down the pay package as excessive, surprising investors and threatening Musk's future at the world's most valuable automaker. caused uncertainty.
Musk did not immediately respond to an emailed request for comment.
Tesla said in a court filing that a judge subsequently upheld a June shareholder vote to uphold the pay package for Musk, the company's driving force and responsible for much of its fundraising, and reinstated his compensation. said that it should be done.
Mr. McCormick also ordered Tesla to pay $345 million to the lawyers who filed the lawsuit, far short of the $6 billion he had originally requested.
Shareholders also flooded the court with thousands of letters arguing that the January ruling made it more likely that Musk would leave Tesla or develop products such as artificial intelligence in ventures outside Tesla.
Lawyers for shareholder Richard Tornetta, who filed a lawsuit in 2018 challenging Musk's compensation package, said Delaware law does not allow companies to use ratification votes to essentially overturn court decisions. He claimed not to have done so.
McCormick found in January that Musk mismanaged the board's 2018 process for negotiating pay packages. The board had said Musk deserved the package because he had achieved all of his ambitious targets for market value, sales and profitability.
However, the judge criticized Tesla's board of directors as being “beholden to” Musk, saying the compensation plan was not suitable for Tesla's board of directors, which has members who have a conflict of interest because of their close personal and financial ties to Musk. It was said that it was proposed by.
After the January ruling, Musk criticized the judge on his social media platform It's unknown.
In his January ruling, the judge called the pay package “the largest compensation plan in history, an immeasurable amount of money.” That was 33 times the next largest executive compensation package, Musk's 2012 pay plan.
Musk's 2018 pay package included stock grants worth about 1% of Tesla stock each time Tesla met one of 12 escalating operating and financial goals. Given.
Mr. Musk did not receive a guaranteed salary. Tornetta claimed that shareholders were not told how easily the goals would be achieved when voting on the package.
