NEW YORK: A court has thrown out the 2018 pay package that helped to make Tesla boss Elon Musk one of the richest people across the world.
Delaware Chancery Court Chancellor Kathaleen McCormick has ruled that Musk and the Tesla board “bore the burden of proving that the compensation plan was fair, and they have failed to meet their burden.
Chancellor Kathaleen McCormick of the Delaware Chancery Court stated in the decision that the concept of fairness calls for a full analysis that takes into contemplation two basic matters: process and price. The process leading to the approval of Elon Musk’s compensation plan was deeply faulty.
Judge Strikes Down Musk’s Multi-billion-dollar Pay Package
The judge also noted that the pay package that Tesla granted Elon Musk was “the largest compensation plan in the public markets history.
In her 200-page verdict, she asked: “Was the wealthy person in the world overpaid?”, saying: “The stockholder plaintiff in this derived lawsuit says so. He claims that Tesla, Inc.’s directors violated their fiduciary duties by awarding Musk a performance-based equity-compensation plan.
The plan has offered Elon Musk the chance to secure 12 tranches of Tesla stock options, each representing 1 percent of Tesla’s total outstanding shares as of January 21, 2018.
Later Tuesday, Elon Musk said on his social media account: “Never incorporate your firm in the state of Delaware.”
Never incorporate your company in the state of Delaware
— Elon Musk (@elonmusk) January 30, 2024
