Elon Musk’s massive 2018 pay package from Tesla — which was worth $56 billion and helped catapult him to the title of richest man in the world — must be rescinded, a Delaware judge reaffirmed Monday.
Kathaleen St. J. McCormick of the Delaware Court of Chancery ruled that Tesla, which asked her to reconsider her original ruling in January, failed to prove that its compensation plan for the Tesla CEO was fair. She stuck with her original decision that the company’s board was under too much influence from Musk when it approved the massive payment in the form of stock options.
Shareholders at the electric car company voted in June to ratify Musk’s 2018 pay package. But that effort amounted to an attempt at “flipping the outcome of an adverse post-trial decision based on evidence they created after trial,” McCormick wrote Monday.
“The large and talented group of defense firms got creative with the ratification argument, but their unprecedented theories go against multiple strains of settled law,” she said.
In response to McCormick’s ruling, Musk posted on social media: “Absolute corruption.” He also called McCormick “an activist posing as a judge.”
The case was adjudicated in Delaware because that’s where Tesla was incorporated until earlier this year, when Musk reincorporated in Texas.
“Never incorporate your company in the state of Delaware,” Musk posted on social media after the original January ruling.
The matter came before McCormick after a Tesla stockholder sued over the pay package in 2022, saying it was an outsized payment to make without ensuring Musk would focus on Tesla. At the time, Musk was pursuing the purchase of Twitter, which he eventually bought and renamed X.
We Need Your Support
Already contributed? Log in to hide these messages.
Musk has been occupied with another calling in recent months: being President-elect Donald Trump’s right-hand man. The two are frequently present at each other’s sides and even spent Thanksgiving together at Mar-a-Lago.
Trump has also tasked Musk with co-leading his yet-to-be-created Department of Government Efficiency, or DOGE. The Tesla CEO has vowed to use his role there to reduce government spending and headcount.