Judge blocks Elon Musk’s $56bn Tesla pay deal
A judge in the US state of Delaware has annulled a $55.8bn (£44bn) pay deal awarded to Elon Musk in 2018 by the electric car company Tesla.
The legal challenge was initiated by a shareholder who contended that the payment was excessive.
Judge Kathaleen McCormick determined that the approval of the pay package by the Tesla board was “deeply flawed.”
In a post on X, a platform owned by Musk, he advised, “Never incorporate your company in the state of Delaware.”
Never incorporate your company in the state of Delaware
— Elon Musk (@elonmusk) January 30, 2024
This pay deal, the largest ever in corporate history, played a significant role in elevating Musk to one of the wealthiest individuals globally. Throughout the week-long trial, Tesla directors argued that the agreement was essential to ensure the continued commitment of one of the world’s most dynamic entrepreneurs to the company.
However, the judge concluded that Tesla and Musk’s legal representatives “failed to demonstrate that the stockholder vote was fully informed” and highlighted “extensive ties with the persons tasked with negotiating on Tesla’s behalf.”