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.
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