(qlmbusinessnews.com Wed. 4th Dec, 2024) London, UK —
Judge Rejects Elon Musk’s Record $56 Billion Tesla Pay Deal.
A Delaware court has upheld its decision to reject Tesla CEO Elon Musk’s unprecedented $56 billion (£47 billion) pay package, despite strong backing from the company’s shareholders and directors earlier this year.
Judge Kathaleen McCormick reaffirmed her earlier ruling from January, stating that Tesla’s board had been overly influenced by Musk when approving the compensation plan in 2018. The deal, described as the largest pay package ever awarded to the head of a publicly traded company, was deemed unfair.
In response to the decision, Musk expressed his frustration on X, formerly known as Twitter: “Shareholders should control company votes, not judges.”
Tesla has announced plans to appeal the ruling, calling it “wrong” and claiming it undermines shareholder rights. In a statement on X, the company argued that the decision could hand power over Delaware companies to “judges and plaintiffs’ lawyers” rather than shareholders.
Pay Package Under Scrutiny.
The contested pay award, which was tied to Tesla’s performance milestones, has faced criticism for its sheer size and alleged lack of proper oversight. Despite 75% of Tesla shareholders approving the deal in a vote held in June, Judge McCormick ruled that the approval process did not meet the required standards of fairness.
The ruling also granted $345 million in fees to the Tesla shareholder who brought the case against Musk, though this fell short of the $5.6 billion in Tesla shares the shareholder had sought.
Broader Implications.
Corporate governance experts have praised the ruling as a safeguard for conflict-of-interest regulations. Charles Elson, from the University of Delaware’s Weinberg Center for Corporate Governance, highlighted key issues with the original pay plan, including a lack of board independence and an overreliance on Musk’s influence.
Elson noted: “The board’s process was dominated by the CEO, and the scale of the pay package was far beyond what could be considered reasonable.”
Looking ahead, analysts speculate Tesla could attempt to reintroduce a similar pay package in Texas, where it moved its legal headquarters earlier this year.
Elon Musk, already the world’s richest person with an estimated net worth of $350 billion, remains a controversial figure. His recent appointment to lead the newly created Department of Government Efficiency by US President-elect Donald Trump has added further intrigue to his already high-profile career.
This News Story is brought to you by QLM Business News, your Digital Media Channel
Visit QLM businessnews.com
For more business news stories also follow us on Facebook, X and Youtube.
To Help qlm business news bring you more new stories like this, please like, share and subscribe.
Unlock unparalleled business growth and effortlessly attract a stream of new customers through QLM Business News Sponsored Advertising. Elevate your brand's presence and captivate your target audience with precision. Visit QLMbusinessnews.com and click on “Advertise” to harness the power of strategic advertising. Don't miss this unparalleled opportunity to propel your business to new heights of success!
Disclaimer: All images presented herein are intended solely for illustrative purposes and may not accurately depict the true likeness of the subjects, objects, or individuals referenced in the accompanying news stories.
