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A Delaware judge has once again blocked Elon Musk’s record-breaking compensation package at Tesla. This decision stops Musk from accessing a massive pay plan that could have been worth $101.4 billion, according to Equilar, a compensation consulting firm. This happened after the value of Tesla’s stock increased significantly.
Impact on Musk’s Wealth
Musk continues to be the richest man in the world despite the decision having an impact on his compensation plan. This is because Musk’s strong relationships with President-elect Donald Trump encouraged investors and caused Tesla’s stock to surge. Moreover, Musk’s wealth surpassed $300 billion, currently standing at $348B, according to Bloomberg Billionaires Index.
Read more: Elon Musk’s Net Worth After Trump Wins
Court’s Previous Rejections
Earlier this year, in January, Judge Kathaleen St. J. McCormick also rejected the plan, calling it excessive. Even after shareholders approved it, she reaffirmed her decision, saying that the deal was unfair to Tesla’s shareholders. McCormick ruled that the Tesla board was unduly influenced by Musk when they approved the pay plan in 2018. She also highlighted that most of the board members had conflicts of interest.
Judge Pushes Back on Board’s Arguments
In her ruling, McCormick disagreed with the idea that a shareholder vote could change the court’s decision. She stated that the Tesla board and Musk had no grounds to reverse her decision. Adding salt to the wound, McCormick awarded $345 million to the lawyers representing shareholder investor, Tornetta, for their work on the case. While this amount was smaller than the lawyers’ original request of 29 million Tesla shares, it’s still one of the largest lawyer payouts in US shareholder lawsuits.
Musk’s Reaction
Elon Musk called the verdict “absolute corruption” in his response on his social media network, X, formerly known as Twitter. “Shareholders should control company votes, not judges,” he added. Musk has said in the past that in order to keep control of Tesla and grow into artificial intelligence, he needs a bigger share in the business.
The Tesla board declared its intention to appeal the verdict to the Delaware Supreme Court following the ruling. It can take several months to make this appeal.
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