The second time Musk’s record $56 billion salary deal has been turned down

The second time Musk’s record $56 billion salary deal has been turned down

A judge has decided not to reinstate Tesla CEO Elon Musk’s record-breaking $56 billion (£47 billion) compensation award.

Despite being authorized by directors and shareholders in the summer, the Delaware court’s ruling follows months of legal struggle.

Judge Kathaleen McCormick maintained her earlier ruling The second time Musk’s from January. In which she claimed that Mr. Musk had too much influence over the board members.

On X, Mr. Musk responded to the decision by writing: “Shareholders should control company votes, not judges.”

Tesla declared that the verdict was “wrong” and promised to appeal it.

The electric car business wrote on X, “This verdict, if not overturned. Means that judges and plaintiffs’ lawyers rule Delaware companies rather than their lawful owners – the shareholders.”

The compensation package would have been the biggest ever for the CEO of a publicly traded business. According to Judge McCormick.

According to her, Tesla was unable to demonstrate that the compensation plan, which began in 2018, was equitable.

The richest person in the world is Mr. Musk, the CEO of SpaceX, Tesla, and X (previously Twitter). The Bloomberg Billionaires Index estimates his current net worth at approximately $350 billion.

He has expressed his opinions on a wide range of subjects using his platform. And once Donald Trump wins the US presidential election in 2024. His stature is expected to rise even more. Mr. Musk has been appointed by the president-elect to head the recently established Department of Government Efficiency, also known as Doge. After the meme about dogs.

The administration will “dismantle Government Bureaucracy. Remove unnecessary rules cut needless expenditures, and reform Federal Agencies” with Doge’s assistance, according to Trump.

“What a combination.”

Although a 75% vote of Tesla shareholders approved the payment in June. The judge disagreed that the amount should be so high, citing the “creative” arguments made by Tesla’s attorneys.

In her perspective, “a stockholder vote could not have a ratifying effect here, even if it could have one elsewhere.”

The judge also decided that the Tesla shareholder who sued the business and Mr. Musk should get $345 million in fees. But not the $5.6 billion in Tesla stock they had requested.

A decision in favor of Mr. Musk and Tesla, according to some analysts. Would have severely damaged Delaware’s conflict of interest regulations.

According to Charles Elson of the University of Delaware’s Weinberg Center for Corporate Governance. The purpose of conflict regulations is to safeguard all investors, not only minority investors.