Delaware judge voids Tesla CEO’s salary package
A judge in Delaware has declared a USD 56 billion salary package for Tesla CEO Elon Musk invalid. She ruled that Musk had too much influence in the background when the plan for share awards was agreed in 2018 for the process to be considered fair.
The judge ruled in favour of the plaintiff in the case, a Tesla shareholder who wants to have the agreement annulled. However, the decision is not final, as the judgment from Delaware can still be appealed.
The decision itself reads as follows: “This posttrial decision enters judgment for the plaintiff, finding that the compensation plan is subject to review under the entire fairness standard, the defendants bore the burden of proving that the compensation plan was fair, and they failed to meet their burden.”
“Swept up by the rhetoric of ‘all upside,’ or perhaps starry eyed by Musk’s superstar appeal, the board never asked the $55.8 billion question: Was the plan even necessary for Tesla to retain Musk and achieve its goals?” wrote Kathaleen McCormick of Delaware’s Court of Chancery.
The Tesla CEO did not wait long to make his response on his social media platform, formerly known as Twitter: “Never incorporate your company in the state of Delaware,” Musk wrote.
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