It looks like Elon Musk will still be left without a $56 billion compensation package from Tesla. The court has blocked these payments. Again.
Back in 2018, shareholders approved a compensation package for Musk that gave him an incentive to achieve important milestones in Tesla’s development — including a market valuation of $650 billion, which is 10 times the company’s value at the time. However, earlier this year the Delaware court canceled this compensation package in response to an investor complaint.
But in the summer, Tesla CEO Robin Denholm once again called on the company’s shareholders to approve a $56 billion payout to Elon Musk. In June, Musk even warned shareholders that he might leave the company if the compensation plan was not approved. As a result, Tesla held a vote, hoping to change the judge’s decision. However, it did not work out as expected.
Although the shareholders voted to approve a substantial payout package, it was not enough to convince the judge to reinstate it. On Monday, Delaware Chancery Court Judge Kathalyn St. Jude McCormick reaffirmed her decision to block the payout plan over concerns about conflicts of interest.
The decision states that Musk does not have «procedural grounds to change the outcome of an unfavorable decision after a trial based on evidence created after the» process. The opinion also calls the assertion that shareholders can change a court decision «generally questionable and undoubtedly false» in this case.
Judge McCormick awarded $345 million to the lawyers representing Tesla shareholders who filed a lawsuit against the $56 billion compensation package. Musk is expected to appeal the decision.
It is worth noting that even without this package, Musk remains the richest man in the world, and Tesla shares continue to rise after Donald Trump’s victory in the US presidential election.
Source: The Verge
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