Judge reaffirms ruling invalidating Musk's multibillion-dollar Tesla pay package
She denied a request by Musk and Tesla’s directors to vacate her earlier ruling.
DOVER, Del. — A Delaware judge has reaffirmed her ruling that Tesla must revoke Elon Musk’s multibillion-dollar pay package
Chancellor Kathaleen St. Jude McCormick on Monday denied a request by attorneys for Musk and Tesla’s corporate directors to vacate her ruling earlier this year requiring the company to rescind the unprecedented pay package.
McCormick also rejected an equally unprecedented and massive fee request by plaintiff attorneys, who argued that they were entitled to legal fees in the form of Tesla stock valued at more than $5 billion. The judge said the attorneys were entitled to a fee award of $345 million.
The rulings came in a lawsuit filed by a Tesla stockholder who challenged Musk’s 2018 compensation package.
McCormick concluded in January that Musk engineered the landmark pay package in sham negotiations with directors who were not independent. The compensation package initially carried a potential maximum value of about $56 billion, but that sum has fluctuated over the years based on Tesla’s stock price.
Following the original court ruling, Tesla shareholders met in June and ratified Musk’s 2018 pay package for a second time, again by an overwhelming margin.
Defense attorneys then argued that the second vote makes clear that Tesla shareholders, with full knowledge of the flaws in the 2018 process that McCormick pointed out, were adamant that Musk is entitled to the pay package. They asked the judge to vacate her order directing Tesla to rescind the pay package.
McCormick, who seemed skeptical of the defense arguments during an August hearing, said in Monday’s ruling that those arguments were fatally flawed.
“The large and
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