Tesla is not backing down in its fight to reinstate CEO Elon Musk’s $56 billion compensation package, despite a Delaware judge’s recent decision to void the pay plan. The electric vehicle maker has announced its intention to challenge the ruling, asserting that the court’s decision is “wrong” and that it will appeal the verdict.
The controversy surrounding Musk’s compensation package stems from allegations of the CEO’s influence over Tesla’s board, which includes several of his close associates. Despite two separate shareholder votes approving the pay plan, Chancellor Kathaleen McCormick deemed the package flawed and rejected the subsequent ratification vote in June.
In response to the court’s ruling, Tesla took to social media to express its discontent, proclaiming that shareholders should have the final say in company matters, not judges. Musk himself described the situation as a case of “lawfare,” hinting at the legal battle ahead as the company moves to appeal the decision.
The legal saga surrounding Musk’s compensation plan also includes a significant attorney fee award for the lawyers representing plaintiff Richard Tornetta, who challenged the CEO’s 2018 pay package. Initially demanding millions of TSLA shares as compensation, Tornetta’s legal team later settled for a cash award of $1.44 billion.
With the appeal process potentially leading to the Delaware Supreme Court, Tesla’s legal battle over Musk’s compensation could drag on for months or even years. In the meantime, the CEO’s pay remains in limbo as the company fights to overturn the court’s decision.
The detailed opinion of Judge Kathaleen McCormick on Elon Musk’s compensation plan can be accessed for further insight into the case. As Tesla continues to push back against the court’s ruling, the outcome of the appeal will likely have significant implications for the future of executive compensation and corporate governance.