Wilmington, Delaware: A Delaware judge plans to rule by year’s end on whether Tesla shareholders’ recent vote reinstated Elon Musk’s previously voided $56 billion pay package. In a letter to lawyers involved in the case, Chancellor Kathaleen McCormick of Delaware’s Court of Chancery stated, “I write to inform you that I aim to issue that decision before the end of this year.”
Musk’s 2018 compensation deal, which awarded him stock options valued at $56 billion, stands as the largest pay package ever granted in U.S. corporate history. Earlier this year, McCormick had ruled that this “unfathomable” compensation was unfair to Tesla shareholders and appeared to have been negotiated by a board too closely aligned with Musk’s interests.
Two significant decisions await the judge’s ruling. One concerns whether Tesla will be required to cover approximately $1 billion in legal fees for the lawyers representing the shareholder who challenged Musk’s pay package. The other centers on determining whether the recent vote by Tesla shareholders legally reinstated Musk’s pay deal after McCormick’s January ruling voided it.
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These rulings will have a substantial financial impact on Tesla and its investors, with multibillion-dollar stakes riding on the outcome.
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