A Delaware court has upheld its decision to block Tesla CEO Elon Musk’s $56 billion pay package, ruling that the award was unfairly influenced by Tesla’s board, which lacked independence.
Judge Kathaleen McCormick argued that despite shareholder approval in 2018, the pay deal was excessive and not adequately justified, marking it as the largest ever for the head of a publicly traded company.
Tesla, calling the ruling “wrong,” vowed to appeal, asserting that it undermines shareholder authority and sets a precedent for judicial overreach in corporate governance.
The case, brought by a Tesla shareholder, also awarded $345 million in legal fees but rejected demands for $5.6 billion in Tesla stock.
Critics of the pay package supported the ruling, citing conflicts of interest within Tesla’s board and an excessive pay structure. Tesla, now legally based in Texas, may attempt to establish a similar compensation plan in the state.
The smirk is gone