Tesla factory in Berlin photo from a drone/Tesla
A blow to Elon Musk, the owners of Tesla and X: The court in Delaware, USA, canceled yesterday the compensation package he deserves at Tesla, worth 55.8 billion dollars. Judge
Kathleen St. J. McCormick ruled on Tuesday in favor of the investors who challenged the salary package approved for Musk and claimed that excessive, according to documents submitted to the court. The judge determined that the compensation package was unfairly given to Musk by the board of directors and invalidated it.
It now appears that the Tesla board of directors will have to approve an alternative package. Another possibility is that Musk will appeal the ruling to the Supreme Court of Delaware.
"Never register a company in the state of Delaware," Musk tweeted after the decision.
Musk.
Don't worry, he'll be fine/Reuters
The trial was conducted after five years ago a Tesla shareholder, Richard Torrenta, filed a lawsuit in which he accused Musk of controlling the compensation issue for himself and directing the board of directors who acted in accordance with his instructions, without the required independence and focus on the company's needs.
Tesla executives backed up the agreement and said that Musk is one of the most dynamic entrepreneurs in the world and that Musk is leading the company to extraordinary successes, and claimed that this is a great deal for the shareholders.
The agreement between Tesla and Musk is considered the largest of its kind in the world and is responsible for a large part of Musk's personal fortune.
The judge ruled that the defense failed to prove that Musk would have left the company if it weren't for the unprecedented compensation plan: "The board of directors never asked the question of the $55.8 billion: Is the plan even necessary to keep Musk in the company and achieve Tesla's goals?" she wrote in her decision.
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The plaintiff's lawyers argued that internal projections showed that Musk was going to be quickly entitled to large parts of the pay package.
It was also argued that the board should have offered a smaller salary package or looked for another CEO and that they should have required Musk to work full-time at Tesla instead of allowing him to focus on other projects, for example Twitter.
The decision comes at a sensitive time for Tesla, which was overtaken last quarter by China's BYD as a manufacturer The world's largest streetcar This state of affairs raised questions about Musk's ability to lead the company.
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