Delaware judge rejects Elon Musk's $56 billion Tesla compensation package

From Investing.com: 2024-12-03 00:41:17

A Delaware judge ruled that Tesla CEO Elon Musk is not entitled to a $56 billion compensation package, despite shareholder support. Musk criticized the decision, and Tesla plans to appeal. The ruling could take up to a year to play out. Musk’s pay package is now valued at around $101 billion.

Chancellor McCormick said Tesla’s board could not reset Musk’s pay package and that the subsequent shareholder vote did not justify reinstating it. Tesla shares fell after the ruling. Musk’s pay package, awarded based on performance and valuation goals, has surged in value since November.

The ruling comes as Musk has been tasked by Trump to create a more efficient government. Musk supported Trump’s election campaign, and the two have a close relationship. Plaintiffs’ lawyers were awarded $345 million in fees, one of the largest in securities litigation history. Shareholders worry Musk may leave Tesla.

Musk’s pay package, awarded based on ambitious targets, has faced criticism for its size. Musk has encouraged companies to follow Tesla’s lead and reincorporate in Texas. The judge found that shareholders were not fully informed about how easily the goals could be achieved. Musk received no salary, only stock grants.



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