A Delaware judge on Tuesday voided a $56 billion payout from billionaire Elon Musk's electric car company Tesla, according to court documents.
Finance Minister Catherine St. Jude McCormick ruled that Tesla's board had failed to justify a compensation plan related to Musk's performance as CEO. according to Until the verdict. Mr. Musk has played a decisive role in developing pay packages, and members of the compensation committee and board of directors with whom he has negotiated maintain significant personal connections with Mr. Musk. (Related article: 'Don't wish me good': Elon Musk explains why he thinks the Biden administration may be out to get him)
“The concept of fairness requires a comprehensive analysis that considers two fundamental issues: process and price,” the judge said. “The process that led to the approval of Mr. Musk's compensation plan was deeply flawed. Mr. Musk had extensive relationships with individuals tasked with negotiating on Tesla's behalf.”
Do not form a company in Delaware
— Elon Musk (@elonmusk) January 30, 2024
The relationship included decades of personal and professional relationships, as well as a former divorce lawyer who “admired Mr. Musk so much that he shed tears during his deposition,” the judge said. wrote.
Additionally, Tesla shareholders who voted to approve the package were behind The judge argued that he was not fully aware of the information in the .
“The price couldn't be any better, either,” she continued. “In defense of their historically unprecedented compensation plan, defendants asked the court to compare what Tesla “gave'' to what Tesla “got.'' This structure created the defendant's argument that the compensation plan was “all positive” for shareholders. Defendants allege that the board's primary objective with respect to the compensation plan was to position Tesla to achieve transformational growth, and that Tesla accomplished this by ensuring Mr. Musk's continued leadership. insisted. ”
The judge said the package was more than 30 times larger than Musk's previous package.
Mr. Musk strongly criticized this ruling. Post Recommendations for incorporating a company in Delaware; ask Whether Tesla should move its incorporation to Texas.
Tesla did not immediately respond to a request for comment from the Daily Caller News Foundation.
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