The courts had already withdrawn this envelope in January, at the request of a shareholder, denouncing it’s assignment by a committee whose members were all close to the entrepreneur.
A judge in Delaware, in the eastern United States, again rejected, on Monday 2 December, a huge compensation plan of 55.8 billion dollars granted by Tesla to its boss Elon Musk, although this amount had been approved by the majority of shareholders of the car manufacturer.Judge Kathaleen McCormick had already rejected this envelope in January, denouncing its assignment by a committee whose members were all close to Elon Musk. It had thus accepted the request of a shareholder of the company, who had taken legal action to obtain the annulment of this compensation.
Despite this first cancellation, the board of directors chose to submit this plan a second time to the general meeting, with an adoption rate by shareholders of 72%. It had already been validated for the first time during the 2018 general Assembly. After this vote in June, Tesla proposed “a meeting between the parties to discuss a proposal for the future” of the case, specifying that the lawyers of the shareholder at the origin of the proceeding had given their consent.
“Smoky Theories”
the initial judgement “he wasn’t saying Musk shouldn’t be paid for his work at Tesla”the magistrate wrote in the decision rendered Monday. “Tesla and Musk could have proposed a new plan that they thought was right and allowed the court to overturn only part of it” of the amount initially awarded, Judge McCormick continued. “Instead, they tried to pass the same plan based on vague theories about Delaware law.”the magistrate regretted.
The car manufacturer condemned this court decision in the evening and announced on X that it will appeal. “Shareholders should control corporate votes, not judges” for his part, multibillionaire Elon Musk responded. The lawyer for the individual shareholder had argued that the decision of the general meeting was not “no legal consequences” on the procedure decided by Judge McCormick. The judge also decided on Monday to award compensation of $345 million to lawyer Gregory Varallo, at Tesla’s expense. In electronic trading after the close on Wall Street, Tesla shares fell just over 1%.