Tesla CEO Elon Musk has once again been denied the $56 billion pay package by Delaware Chancellor Kathaleen McCormick. This decision comes after Tesla shareholders voted to award Musk the massive sum despite the initial rejection by McCormick in January.
The pay package, which was challenged by shareholder Richard J. Tornetta, was deemed unfair to shareholders by McCormick due to the “unfathomable sum” being awarded to Musk. Despite the overwhelming support from Tesla shareholders to award Musk the money once again, Chancellor McCormick has once again ruled against it.
In response to the ruling, Tesla expressed disappointment, stating that a Delaware judge had overruled the majority of shareholders who voted to pay Musk what he deserves. The company plans to appeal McCormick’s decision.
One of the most surprising aspects of the ruling is that Tesla will be forced to pay $345 million in fees to lawyers representing Tornetta and other shareholders. These lawyers had originally requested over $5.5 billion from the case, with the intention of receiving it in the form of Tesla stock.
The lawyers involved in the case stated that they hope the chancellor’s decision will bring an end to the matter for Tesla shareholders. They also expressed their willingness to defend the judgment if Tesla decides to appeal.
It appears that Chancellor McCormick did not believe that the shareholder vote and subsequent board vote were a reasonable way to reinstate the pay package. She argued that allowing defeated parties to create new facts for the purpose of revising judgments would make lawsuits interminable.
Despite the setbacks, Tesla remains determined to fight for Musk’s $56 billion pay package. The company’s ongoing legal battle highlights the complex nature of executive compensation and corporate governance in the modern business world.