Elon Musk cannot keep Tesla pay package worth more than $55 billion, judge rules

Discussion in 'Politics' started by Tony Stark, Jan 30, 2024.

  1. Tony Stark

    Tony Stark

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    By RANDALL CHASE
    Updated 6:25 PM CST, January 30, 2024

    DOVER, Del. (AP) — Elon Musk is not entitled to landmark compensation package awarded by Tesla’s board of directors that is potentially worth more than $55 billion, a Delaware judge ruled Tuesday.

    The ruling by Chancellor Kathaleen St. Jude McCormick comes more than five years after a shareholder lawsuit targeted Tesla CEO Musk and directors of the company. They were accused of breaching their duties to the maker of electric vehicles and solar panels, resulting in a waste of corporate assets and unjust enrichment for Musk.

    The shareholder’s lawyers argued that the compensation package should be voided because it was dictated by Musk and was the product of sham negotiations with directors who were not independent of him. They also said it was approved by shareholders who were given misleading and incomplete disclosures in a proxy statement.

    Defense attorneys countered that the pay plan was fairly negotiated by a compensation committee whose members were independent, contained performance milestones so lofty that they were ridiculed by some Wall Street investors, and blessed by a shareholder vote that was not even required under Delaware law. They also argued that Musk was not a controlling shareholder because he owned less than one-third of the company at the time.