Photo credit: www.cnbc.com
Elon Musk’s Attempt to Reinstate Record Pay Package Denied by Delaware Court
In a significant legal ruling, Tesla CEO Elon Musk was unsuccessful in his efforts to reinstate a controversial compensation package valued at approximately $56 billion. A Delaware judge maintained her previous decision that the pay plan was issued improperly.
This compensation plan was notable for being the largest ever awarded to a public company executive in the U.S. Musk’s legal team presented arguments in a Delaware business court following the trial, hoping to overturn the judge’s ruling that nullified the pay package. In June, Tesla sought to “ratify” the original pay plan during its annual shareholder meeting in Austin, Texas.
Chancellor Kathaleen McCormick, who presided over the case, articulated her reasoning in a ruling on Monday, stating, “Even if a stockholder vote could have a ratifying effect, it could not do so here.” The judge also approved a $345 million fee award for the legal team that successfully advocated on behalf of Tesla shareholders to cancel the compensation package.
The legal firm representing the plaintiffs, Bernstein, Litowitz, Berger & Grossmann, expressed satisfaction with the ruling, thanking the Chancellor and her staff for their diligence in navigating the complexities of the case.
Musk retains the option to appeal this decision to the Delaware Supreme Court. Previously, following McCormick’s January ruling that voided the pay plan, Musk expressed his frustration via social media, advising others against incorporating in Delaware. Subsequently, Tesla held a vote to relocate its incorporation to Texas, completing this transition in June.
In her response to Musk’s motion arguing that the shareholder ratification should prompt a reconsideration of her ruling, Judge McCormick emphasized the importance of maintaining judicial integrity, cautioning that allowing new facts to be introduced post-judgment could lead to endless litigation.
Despite this legal obstacle, Musk’s financial status has seen a remarkable increase lately. He has gained over $43 billion since the recent election of Donald Trump as President. This financial surge has been largely attributed to a 42% rise in Tesla’s stock price in the four weeks following the election, driven by investor optimism regarding Musk’s potential influence on favorable policies under the new administration.
As of the latest market closing, Musk’s Tesla stock is valued at nearly $150 billion, positioning him among the world’s richest individuals, not even accounting for his substantial holdings in other ventures like SpaceX.
This is breaking news. Please refresh for updates.
WATCH: Elon Musk emerges as key voice in Trump’s tech policy
Source
www.cnbc.com