Elon Musk, CEO of Tesla and SpaceX and former owner of Twitter Inc., speaks at The New York Times’ Annual Dealbook Conference in New York City on November 29, 2023. Speak at the summit.
Michael M. Santiago | Getty Images
A Delaware judge on Tuesday invalidated the $56 billion compensation package. tesla Chief Executive Officer Elon Musk ruled that the company’s board “failed to determine that the compensation plan was fair.”
Tesla stock fell about 3% in after-hours trading Tuesday on news of the ruling in a Delaware Chancery Court lawsuit brought by the electric car maker’s shareholder, Richard Tornetta.
The 2018 CEO pay package Tesla gave Musk was unprecedented in corporate compensation, making the Tesla and SpaceX boss a multi-billionaire and the richest person on the planet.
In her judgment, Treasury Court Judge Kathleen McCormick said Tornetta had proven that Musk “controlled Tesla” and that the process by which the board approved Musk’s compensation had “serious flaws”. It was determined that there was.
Mr. Musk has “extensive relationships with individuals tasked with negotiating on behalf of Tesla,” including “executives who benefit from Mr. Musk; Also included was General Counsel Todd Marron, a “former divorce lawyer” of
“Plaintiffs have the right to rescind,” McCormick wrote in his decision.
“The parties have written a joint letter discussing the form of a final order implementing this decision and identifying all issues, including costs, that would need to be addressed to bring this matter to trial level,” McCormick said. I will submit it.”
CNBC has reached out to Musk, his attorney, and Tornetta’s attorney for comment.
“Never set up a company in Delaware,” Musk wrote in a tweet late Tuesday afternoon.
Earlier this month, Musk began vying for 25% of Tesla’s voting control.
He currently owns approximately 13% of the company’s stock.
In a post on social media It’s not so much that it can’t be overturned.” Media site formerly known as Twitter.
Mr. Musk owns and operates X.
– Additional coverage by CNBC Laura Kolodny
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