The huge $55.8 billion compensation granted by Tesla to Elon Musk in 2018 was canceled because it was excessive and improperly approved by Tesla's board of directors, over which the billionaire has a lot of influence.
The decision of Delaware judge Kathaleen McCormick puts Musk's title of global Scrooge at risk who, without the 55.8 billion, risks slipping to third place behind Bernard Arnault and Jeff Bezos.
For the owner of Tesla, Delaware's decision is a hard blow, which risks overshadowing Neuralink's success in implanting its first chip in a human being and which weighs on Tesla shares on Wall Street, where they lose more than 1, 5%.
In justifying his decision, the judge described Musk's compensation as an "incomprehensible figure", "unprecedented" and "incredible".
And he defined the process that led the board of directors to approve it as "deeply flawed": "It is surprising that there were no significant negotiations on the terms of the plan" and its structure, said McCormick, defining Musk as a "Superstar CEO" with "tight ties with the people who should negotiate and negotiate in the interests of Tesla."
The members of the board of directors - he added - have "cooperated with Musk, not negotiated against him".
During the trial over his compensation—the highest in history—Musk had assured that he would use the resources to finance the colonization of Mars, one of his dreams.
"Colonizing Mars is expensive. Musk believes he has a moral obligation to direct his wealth towards this goal, including his compensation to Tesla", the judge further observed in his sentence, explaining how for the billionaire his work in the giant of electric cars has value only if the resources it generates can create "multi-planetary life".
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By agreeing with the Tesla shareholders who had sued and postponing to the parties involved the definition of how Musk will have to repay the amount, McCormick with his decision fuels the debate on the composition of the Tesla board and its adequacy to control the billionaire.
But also on how the board of directors will respond to Musk's request to have a greater stake in the company, at least 25%, to prevent it from being purchased and from developing robots and other artificial intelligence technology.
It is not the first time that relations between Musk and the Tesla board of directors have come under scrutiny.
In fact, already in 2021 they had been sifted again in a Delaware court for the purchase of SolarCity, another of Musk's companies.
The judge in that case, however, sided with the billionaire, establishing that the board of directors had examined the agreement carefully and appropriately and had not approved it under Musk's influence.
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