Shocking Blow to Elon Musk: $56 Billion Tesla Pay Package Overturned Again as Judge Slams Improper Influence
A U.S. district judge has once again nullified Elon Musk’s $56 billion compensation package, Bloomberg reports. Despite initial shareholder approval, Judge Kathaleen St. J. McCormick of the Delaware Chancery Court ruled for the second time on December 2 that Tesla’s board was improperly swayed by Musk when they approved the record-setting deal in 2018. Her previous ruling in January had already struck down Musk’s enormous pay plan, which ballooned from an initial $2.6 billion to $56 billion, and from a recent valuation would have been worth $101.5 billion based on stock options.
The judge’s decision could potentially strip billions from Musk’s wealth, although he remains the world’s richest person, buoyed by Tesla’s strong market performance and investor confidence in his relationship with U.S. President-elect Donald Trump. Musk’s net worth recently hit a historic high, surpassing the previous record of $340.4 billion, driven by a stock rally post-election and a new funding round for his AI startup.
Tesla plans to challenge the ruling in the Delaware Supreme Court, a process expected to take several months. Judge McCormick pointed out that the board capitulated to Musk’s demands rather than independently setting a reasonable compensation amount, emphasizing the undue influence Musk had during the decision-making process.
Following the ruling, Tesla shares fell in after-hours trading in New York. On social media platform X, formerly Twitter, Musk commented on the decision, labeling it as “absolute corruption.” If upheld, the ruling will compel Tesla’s board to devise a new compensation proposal for Musk. (With inputs from Bloomberg)
Original Story https://www.livemint.com/companies/news/elon-musk-tesla-56-billion-pay-package-reject-delaware-judge-board-improper-influence-richest-man-business-legal-us-news-11733196967017.html
Category :
Tags:
