Tesla CEO Elon Musk Loses Bid to Reinstatement of 2018 CEO Pay Package
A Delaware judge has upheld her previous ruling that Tesla’s 2018 CEO pay package, worth around $56 billion, was improperly granted. The package, which was the largest compensation plan in US history for a public company executive, was deemed “deeply flawed” by the court.
Chancellor Kathaleen McCormick had previously voided the pay plan, ruling that Musk had individually “controlled” Tesla and dictated the terms of his compensation to a board that did not fairly negotiate. The process leading to the approval of the pay plan was deemed “flawed”.
Tesla planned to appeal the ruling, with Musk calling it “absolute corruption” on social media platform X, which he owns. The company also held a shareholder vote in June, asking investors to “ratify” the 2018 CEO pay plan, but the court refused to revise its decision.
In her opinion, McCormick noted that a shareholder vote could not alter the result, stating that if it did, “lawsuits would become interminable.” Instead, she approved a $345 million attorney fee award for the lawyers who successfully sued on behalf of Tesla shareholders to void the pay plan.
Musk, the world’s second-richest person with a net worth over $150 billion, has seen his net worth jump significantly in recent weeks, despite the legal setback. He has also moved the state of incorporation for Tesla and his defense contractor company SpaceX from Delaware to Texas.
