Washington, Dec. 3, (dpa/GNA) – A US court on Monday reaffirmed its decision to reject Tesla boss Elon Musk’s $56 billion compensation package, despite support from Tesla shareholders.
The judge in Delaware upheld her January ruling that Musk is not entitled to his multi-billion-dollar pay package, stating that Musk had too much influence behind the scenes when the plan for share awards was agreed to in 2018 for it to be regarded as a fair process.
Based on Monday’s closing price, the package is now worth $100 billion due to a significant rise in Tesla’s share price.
Judge Kathaleen McCormick of the Delaware Court of Chancery, a top US business court, also awarded the plaintiffs $345 million in fees. They had asked for $5.6 billion, based on the legal principle of a percentage of the benefit ($56 billion) to be received.
“In a case about excessive compensation, that was a bold ask,” McCormick wrote in her 103-page opinion. The plaintiffs can choose to have the $345 million be paid out in cash or Tesla stock, she said.
In January, McCormick ruled that Musk, as part of Tesla’s board of directors, had exerted too much influence from the sidelines of negotiations on the generous remuneration.
The judge argued that shareholders had been kept in the dark about his involvement, meaning they didn’t have the opportunity to make a considered decision, leading the judge to side with the plaintiff seeking to annul the agreement with Musk.
In June, Tesla shareholders approved the multi-billion-dollar pay package for Musk again, but this did not guarantee Musk’s victory in court. Tesla can still appeal the decision.
GNA