WASHINGTON, DEC 4 – A United States (US) judge today upheld his decision to reject a massive US$55.8 billion compensation package for Elon Musk at Tesla, denying efforts to restore the pay deal through a shareholder vote.
In a court filing, Chancellor Kathaleen McCormick of the Delaware Court of Chancery ruled that Tesla’s efforts to ratify Musk’s compensation package through a shareholder vote in June could not override its decision in January that struck down the package as excessive and unfair to shareholders.
McCormick found several flaws in Tesla’s confirmation efforts, including incorrect statements in documents provided to shareholders about the impact of their votes.
“The motion to reconsider is denied,” McCormick wrote.
“With a large and talented group of defense firms, they got creative with the confirmation argument, but their extraordinary theories ran counter to some established legal guidelines,” he added.
In a statement on Musk’s X social media platform, Tesla said it would appeal the decision.
“Shareholders should control how companies vote, not judges,” Musk said, in a separate post.
The court also awarded US$345 million in attorneys’ fees, far less than the $5.6 billion requested by plaintiff attorneys Richard Tornetta, a Tesla shareholder.
While acknowledging that their calculation method was technically valid under Delaware law, which calculates payments based on a percentage of benefits achieved, McCormick ruled that a reward of that magnitude would be considered excessive profit. – AFP
