Judge rejects Elon Musk's $56,000 million compensation package from Tesla as 'excessive'

A Delaware judge ruled on Monday Elon MuskConsejero delegado de Tesla, aún no tiene derecho va recibir un $56,000 million compensation package a pesar de que los electric car company shareholders voted in favor of its reinstatement in June.

Court of Chancery Judge Kathleen McCormick is following up on her decision, which adjusts the pay package since January. excessive And he canceled it, surprising investors and creating uncertainty about Musk's future at the world's most valuable automaker.

Musk did not immediately respond to Reuters' request for comment, but in a statement published on X Tesla, he said the judge had overturned an absolute majority of shareholders, saying “Fallo is wrong and we will appeal.”

Musk and Tesla may appeal to the Delaware Supreme Court when McCormick dictates a final order, which could happen as soon as this week. The appeal may take up to a year to be resolved.

Tesla said in court filings that the judge should recognize the vote no later than June shareholders in favor of a pay package for Muskla fuerza impulsora de la empresa y responsable de muchos de sus avances, y restablecer su compensation.

McCormick said Tesla's board had no rights to the pulsar “reset” Restore Musk's salary package. In his 101-page argument, he said: “If the tribunal were to adopt the practice of allowing losing parties to create new facts for the purpose of reconsideration of judgments, litigation would be endless.”

He confirmed that a ratification vote, such as the one used by Tesla, had to be made before the court, and that a company could not ratify a transaction involving a conflicting controller. Ella Había determinado que Musk controlled salary negotiations.

Unfortunately, Tesla committed many crimes material errors Customer-respecting representation is not heralded as a “panacea” for rewarding Musk.

Tesla shares fell 1.4% in after-hours trading.

Gary Black, Socio Gerente de The Future Fund, which owns Tesla shares, said he believes the Delaware Supreme Court in X was more pragmatic than McCormick. “Dudo que este fallo se resuelva pronto, y es es es es probabilida que se sea revocado por un tribunal más moderado en el camino,” he wrote.

The salary package gave Musk options sobre acciones If the company meets performance and evaluation goals.

Although the award was initially valued at $56,000 million, Tesla's shares were revalued by 42% after Donald Trump, the Republican Party candidate backed by Musk, won the US presidential election on November 5. Later on, The salary package is worth 101,000 million dollars.

It comes as Musk takes on Trump's mandate to create a more efficient government by cutting spending. El papel como codirectoru del nuevo Departamento de Eficiencia will be unofficial instead of a government job, allowing Musk to continue his work at Tesla as well as lead other companies, including rocket maker SpaceX.

Musk participated in Trump's election campaign and became a close adviser in the process.

345 million manats

McCormick also ordered Tesla will pay 345 million dollars to the lawyers who took the claiminitially raised $6,000 million. Nevertheless, it is one of the largest damages ever awarded in a value judgment. The payments could be paid in cash or Tesla stock, he said.

Bernstein Litowitz Berger & Grossmann, one of the three plaintiffs' law firms, said in a statement that “we are pleased with Judge McCormick's decision, which rejects Tesla's invitation to continue to inject uncertainty into the litigation.”

El Bufete also expressed his hope that Musk and Tesla will defend the tribunal's opinion if they appeal.

Despite the security, Tesla flooded the court with thousands of letters. Musk's pay cut makes it more likely that he will give up Tesla unlike Tesla, intelligenia produces man-made products.

Private investors and Musk's influential followers helped Tesla and Musk win the shareholder vote in June, and many spoke out against Monday's decision on social media.

“Besides the pedantic details of legal procedure, the most important question here is que The vote of the shareholders is cancelled“, said Omar Gazi in a post on X from @WholeMarsBlog después del fallo del lunes. “Si no pueden considerar el voto en este caso, esperemos que considere en la appeal”, said Gazi, que tiene más de 551.00.

McCormick appointed in January Musk mismanaged the 2018 junta process to negotiate a salary. Junta said Musk deserved the package because he had achieved all of his ambitious goals of market value, revenue and profitability.

After the ruling in January, Musk criticized the judge on the X social networking platform and encouraged other companies to follow Tesla's example and reorganize from Delaware to Texas, though it's unclear if any companies have done so.

La jueza, en su sentencia de enero, set the salary package as el “Mayor's plan de la history reparations plan, unforgettable”. That was 33 times the mayor's executive compensation package below Musk's 2012 pay plan.

Musk's 2018 pay package included stock grants worth about 1% of Tesla shares each time the company met one of 12 targets for operating and financial growth.

Musk did not receive any guaranteed salary. Tornetta argued that shareholders were not informed about the ease of achieving the goals when they voted on the package.