A Delaware judge has ruled against reinstating Musk’s 2018 $56 billion CEO pay package, calling it “deeply flawed.” This package was the largest in U.S. history for a public company executive.
“The ruling is wrong, and we’re going to appeal,” said Tesla in a statement on X.
Musk, also speaking via X, said that “shareholders should control company votes, not judges.”
Chancellor McCormick made a ruling in January that Musk had “controlled Tesla” and negotiated his pay package with a board that negotiated unfairly.
In June at its annual meeting in Austin, Texas, Tesla asked investors to “ratify” Musk’s 2018 CEO pay plan, with shareholders voting in favor of reinstating the plan.
“Even if a stockholder vote could have a ratifying effect, it could not do so here,” McCormick explained, “Were the court to condone the practice of allowing defeated parties to create new facts for the purpose of revising judgments, lawsuits would become interminable.”
McCormick approved a $345 million attorney fee award for the lawyers who successfully voided Musk’s pay plan.
“We are pleased with Chancellor McCormick’s ruling, which declined Tesla’s invitation to inject continued uncertainty into Court proceedings and thank the Chancellor and her staff for their extraordinary hard work in overseeing this complex case,” stated attorneys from Bernstein, Litowitz, Berger & Grossmann.
Musk and Tesla intend to appeal the decision to the Delaware Supreme Court once a final order has been entered.
By CEO NA Editorial Staff
