Judge rejects Elon Musk's $56B pay package again
Judge Kathaleen McCormick upheld her rejection of the Tesla CEO's unprecedented compensation deal


What happened
A Delaware judge Monday upheld her rejection of Tesla's $56 billion compensation package for CEO Elon Musk. Court of Chancery Judge Kathaleen McCormick initially struck down the package in January, agreeing with plaintiffs that the 2018 pay deal was improperly negotiated with an insufficiently independent board of directors. The package's stock options are now worth more than $100 billion, based on Tesla's closing price yesterday.
Who said what
Lawyers for Tesla and Musk argued that a shareholder vote in June affirming the compensation deal resolved McCormick's objections. But the judge disagreed, writing that the "unprecedented theories" put forward by the "creative" and "talented" defense lawyers violated "multiple strains of settled law." Tesla said it will appeal the ruling. Musk said on X that "shareholders should control company votes, not judges." He "remains the world's richest person" after Monday's decision, The Washington Post said.
What next?
The ruling "presents Tesla's board with few easy remedies to compensate Musk for a decade of essentially unpaid work," The Wall Street Journal said. The board "will most likely try to fashion a new pay package that falls under the jurisdiction of Texas," where Tesla is now registered, The New York Times said.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Peter has worked as a news and culture writer and editor at The Week since the site's launch in 2008. He covers politics, world affairs, religion and cultural currents. His journalism career began as a copy editor at a financial newswire and has included editorial positions at The New York Times Magazine, Facts on File, and Oregon State University.
-
9 grab-and-go toiletry sets that make packing a breeze
The Week Recommends All the essentials in one place
-
'Thriving' ecosystem found 30,000 feet undersea
Speed Read Researchers discovered communities of creatures living in frigid, pitch-black waters under high pressure
-
Harris rules out run for California governor
Speed Read The 2024 Democratic presidential nominee ended months of speculation about her plans for the contest
-
Palantir: The all-seeing tech giant
Feature Palantir's data-mining tools are used by spies and the military. Are they now being turned on Americans?
-
Grok brings to light wider AI antisemitism
In the Spotlight Google and OpenAI are among the other creators who have faced problems
-
What's Linda Yaccarino's legacy? And what's next for X?
Today's Big Question An 'uncertain future' in the age of TikTok
-
Nvidia hits $4 trillion milestone
Speed Read The success of the chipmaker has been buoyed by demand for artificial intelligence
-
X CEO Yaccarino quits after two years
Speed Read Elon Musk hired Linda Yaccarino to run X in 2023
-
Musk chatbot Grok praises Hitler on X
Speed Read Grok made antisemitic comments and referred to itself as 'MechaHitler'
-
The god in the machine
Feature An AI model with superhuman intelligence could soon become reality. Should we be worried?
-
Another Starship blast sets back Musk's Mars hopes
Speed Read Nobody was killed in the explosion, which occurred in south Texas