Tesla CEO Elon Musk’s record-breaking multi-billion pay package was once again rejected by the US court.
Delaware Chancery Court Chancellor Kathaleen McCormick on Monday, December 2, 2024, for the second time rejected the $56bn (£47bn) pay award for Musk despite shareholders' approval of the package at a June 2024 meeting, reported CNN.
Previously, McCormick ruled in favor of the shareholders who challenged the CEO package in court, arguing that both parties, the tech giant and the Tesla board, “bore the burden of proving that the compensation plan was fair, and they failed to meet their burden.”
In the latest ruling, Chancellor of Delaware’s Court of Chancery said there was no legal precedent to change her previous decision, and if courts condoned “the practice of allowing defeated parties to create new facts for the purpose of revising judgments, lawsuits would become interminable.”
“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 wrote in a 103-page opinion.
Meanwhile, reacting to the ruling, Musk wrote on X, “Shareholders should control company votes, not judges."
The electric car company also called the decision “wrong” and said, “This ruling, if not overturned, means that judges and plaintiffs’ lawyers run Delaware companies rather than their rightful owners, the shareholders.”
Furthermore, even though 75% of shareholders voted for it, Judge McCormick said that the pay package was the largest ever for a CEO.
