What’s next in the legal battle over Elon Musk’s $100 billion pay deal
Subscribe to enjoy similar stories. Elon Musk’s record-breaking Tesla compensation package has hit another roadblock, after a Delaware judge on Monday again rejected the pay deal, now worth nearly $100 billion. The ruling presents a dilemma for Tesla’s board of directors, who had warned that Musk’s pay package as CEO is vital to keep the serial entrepreneur’s attention on the carmaker at a time when electric-vehicle sales are under pressure.
Musk responded to the ruling, saying shareholders and not judges should control company votes. The value of the pay package, which fluctuates based on Tesla’s stock price, has more than doubled from early this summer, with shares in the electric-car maker rallying in recent weeks. The company’s board now has limited options in how to respond to the ruling with little hope of a quick payday for Musk, whose 2018 compensation package has been tied up in litigation for years.
Tesla said Monday it plans to appeal. It has 30 days to file such an action with the Delaware Supreme Court, but legal experts say the company faces a protracted legal battle with a small possibility of success. The EV maker’s legal arguments will also be narrower than at the initial trial.
The appellate court only in rare cases will re-examine the key facts of the case, including whether shareholders were misled by the board of directors when they first approved the package in 2018, legal experts say. Tesla’s lawyers can argue that Chancellor Kathaleen McCormick’s ruling misinterpreted the law, didn’t properly handle ratification or that the $345 million in legal fees awarded to the plaintiff’s attorneys was too high. The plaintiff’s lawyers originally asked for a sum worth $5.6 billion in Tesla stock, which
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