Tesla CEO Elon Musk lost his bid to get his 2018 CEO pay package reinstated on Monday when a Delaware judge upheld her prior ruling that the compensation plan was improperly granted.
The package, worth about $56 billion, was the largest compensation plan in US history for a public company executive.
Musk attorneys attempted to sway the judge in the Delaware business court after the trial to reverse her opinion rescinding the CEO’s pay plan. Tesla had conducted a shareholder vote to “ratify” Musk’s 2018 pay plan at the EV maker’s annual shareholder meeting in Austin, Texas, in June.
Judge Kathaleen McCormick wrote in her opinion on Monday that, “Even if a stockholder vote could have a ratifying effect, it could not do so here.” The judge approved a $345 million attorney fee award for the lawyers who successfully sued on behalf of Tesla shareholders in order to void the pay plan.
“We are pleased with Chancellor McCormick’s ruling, which declined Tesla’s invitation to inject continued uncertainty into court proceedings and thank the Chancellor and her staff for their extraordinary hard work in overseeing this complex case,” attorneys from Bernstein, Litowitz, Berger & Grossmann, the firm representing the plaintiff, said in a statement.
Musk can appeal the decision to the Delaware Supreme Court.
Following McCormick’s decision in January to void the plan, Musk lashed out at the court, posting on X, “Never incorporate your company in the state of Delaware.” The company then held a shareholder vote to reincorporate in Texas, and officially shifted its incorporation there in June.
In response to Musk’s motion arguing that Tesla’s ratification vote for his pay package should lead her to reverse her prior opinion, Judge McCormick wrote, “Were the court to condone the practice of allowing defeated parties to create new facts for the purpose of revising judgments, “Lawsuits would become interminable.”
Despite the setback, Musk has seen his net worth jump considerably in recent weeks. Excluding all of the options wrapped up in the pay package, Musk is more than $43 billion richer since Donald Trump’s election victory last month. Tesla shares have soared 42% in the four weeks since the election on optimism that Musk’s coziness with the incoming president will lead to policies favorable to his companies.
His Tesla stock is worth close to $150 billion based on Monday’s closing price. That alone, not including his SpaceX holdings, would put him among the world’s wealthiest people.
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