A Delaware judge on Monday again blocked Elon Musk's multibillion-dollar compensation package from Tesla.
The controversial compensation deal, currently worth more than $100 billion, was re-approved by Tesla shareholders in June. But Delaware Chancellor Judge Catherine McCormick declined to overturn an earlier decision invalidating the pay package.
“A large and powerful defense industry group has brought inventiveness to the ratification argument, but their unprecedented theory violates multiple established laws,” McCormick wrote in an opinion Monday. .
McCormick put the compensation agreement on hold in January, deciding there had not been fair negotiations. After the shareholder vote in June, Musk's lawyers asked the judge to reconsider her decision.
He rejected this, pointing out that there is no basis for overturning a decision based on evidence made after a trial, such as a shareholder ratification vote, and that the issue of ratification cannot be raised for the first time after a decision is made after a trial.
McCormick also questioned the validity of claims made by Musk's lawyers.
“There is no common law basis for what defendants call 'common law ratification.' A shareholder vote alone cannot ratify a transaction with a conflicting party,” she added.
Tesla vowed Monday night that it would appeal the decision.
“A judge in Delaware has ruled against the overwhelming majority of shareholders who own Tesla and voted twice to pay @elonmusk what he's worth,” the electric car maker wrote in a post on X I wrote it in
“The court's decision is wrong and we will appeal.” “Even if this ruling is not overturned, it means that judges and plaintiffs' attorneys are running Delaware corporations, not their legitimate owners, the shareholders.”
Musk dismissed the decision as a “violation of the law” and argued in a series of posts about Company X, which he also owns, that “shareholders should control company votes, not judges.”
Musk's total salary increased significantly as Tesla's stock price soared after the election. The company's stock has risen nearly 45% since election day on hopes that President-elect Trump's victory could benefit Tesla's CEO.
