Elon Musk, the CEO of Tesla, loses his attempt to have his $56 billion compensation package restored
A Delaware judge upheld her earlier decision that the compensation plan was illegally awarded, therefore Elon Musk, the CEO of Tesla, lost his attempt on Monday to get his 2018 CEO pay package reinstated.
At over $56 billion, the package was the biggest executive compensation plan for a publicly traded firm in American history. Tesla announced its intention to appeal the decision in a post on Musk’s social media site, X. In a different X post, Musk referred to the decision as
“absolute corruption.”
By declaring that Musk had personally “controlled Tesla” and dictated the terms of his salary to a board that failed to engage in reasonable negotiations, Chancellor Kathaleen McCormick invalidated the pay plan in January. She called the procedure that resulted in that salary plan being approved and addresses as “deeply flawed.”
In response to the viewpoint, Tesla asked investors to “ratify” Musk’s 2018 CEO compensation plan during a shareholder vote held in June at its annual meeting in Austin, Texas. Using the outcome of that vote, Musk’s lawyers tried to persuade the judge to change her mind following the trial.
“Even if a stockholder vote could have a ratifying effect, it could not do so here,” McCormick wrote in her opinion Monday. “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.”
The $345 million attorney fee judgment for the attorneys who successfully sued on behalf of Tesla shareholders to nullify Musk’s pay plan was granted by McCormick as part of Monday’s opinion. Said in a statement..
“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,”
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