From Nasdaq Corporation:

Delaware Chancery Court Chief Judge Kathleen McCormick has struck down Tesla CEO Elon Musk’s $55 billion 2018 compensation plan following a lawsuit by disgruntled shareholders. This decision introduces uncertainty and tension at a challenging time for Tesla, and could negatively impact Musk’s control and cash flow. Shares of Tesla subsequently fell 3.35% in premarket trading.

The future of Tesla’s compensation plan lies in the hands of the Delaware Supreme Court, and potentially the Supreme Court, or in the board’s development of an alternative plan. Analysts and investors are concerned about the impact of the verdict, and suggest potential solutions for moving forward with Musk’s CEO compensation. Elon Musk’s net worth could fall by $50 billion if his options are excluded, dropping him from the richest person to the third-richest globally.

Elon Musk took to his social media platform to express exasperation at the court’s ruling and posted a poll asking followers whether Tesla should change its place of incorporation to Texas, a move that a majority of respondents favored. Musk also engaged with comments from his followers, including addressing the observation about the federal government’s loss in the situation, and a lament on the challenges of being a public company. This public dispute complicates the uncertainty surrounding Tesla and Musk.

The uncertainty surrounding Musk’s compensation plan introduces tension and risk into Tesla’s future as the board and shareholders grapple with the impact of the court’s decision. The lawsuit challenges Musk’s substantial pay package and could potentially alter his control and cash flow. The ongoing dispute over compensation further complicates the situation for Tesla.

Following the court’s decision, uncertainty surrounds Tesla and Musk with the potential ramifications on Musk’s control, cash flow, and position as the richest person globally. The ongoing tension and dispute over Musk’s compensation plan further complicates the situation for Tesla as shares fell in response to the court ruling.



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