A judge in Delaware has reaffirmed that Elon Musk’s 2018 compensation package from Tesla, originally estimated at $56 billion, was excessive and affected by his dominance over the board of directors. Despite over 70% of shareholders approving the package in a subsequent vote, Judge Kathaleen St. Jude McCormick stated that the vote could not rectify the conflicts of interest present during the negotiation process.
McCormick stated, “A stockholder vote standing alone cannot ratify a conflicted-controller transaction.”
Musk criticized the ruling on social media, arguing that shareholders should have control over company votes. Musk wrote, “Shareholders should control company votes, not judges.”
Meanwhile, Musk’s wealth has continued to grow, with SpaceX reportedly valued at $350 billion, and his overall net worth reaching $353 billion, making him the richest person in the world.
Tesla’s X account said, “A Delaware judge just overruled a supermajority of shareholders who own Tesla and who voted twice to pay [Elon Musk] what he’s worth.”
X added, “The court’s decision is wrong, and we’re going to appeal. This ruling, if not overturned, means that judges and plaintiffs’ lawyers run Delaware companies rather than their rightful owners – the shareholders.”
1.76 BILLION shares voted in favor of Elon Musk's pay package (vs 528m against)
Judge McCormick overruled them all
Do not incorporate in Delaware pic.twitter.com/WZjKxRhv8A
— End Wokeness (@EndWokeness) December 3, 2024
If the ruling is upheld, Tesla could potentially create a new compensation package in a more favorable legal environment after moving its incorporation from Delaware to Texas.
