Judge again rejects Musk’s $55.8 billion Tesla pay deal
WASHINGTON
FILE - Elon Musk speaks at a campaign rally, Oct. 27, 2024, in New York.
A U.S. judge has upheld her decision to reject Elon Musk's massive $55.8 billion compensation package at Tesla, denying an attempt to restore the pay deal through a shareholder vote.
In a court filing, Chancellor Kathaleen McCormick of Delaware's Court of Chancery ruled that Tesla's attempt to ratify Musk's compensation package through a June shareholder vote could not override her January decision striking down the package as excessive and unfair to shareholders.
The court also awarded $345 million in attorney fees, significantly less than the $5.6 billion requested by the lawyers of plaintiff Richard Tornetta, a Tesla shareholder.
Shareholders originally backed the Musk compensation plan in March 2018 that was specifically designed to reward the 53-year-old founder for Tesla's significant growth.
But in a lawsuit, Tornetta accused the defendants of failing in their duties when they authorized the pay plan and alleged that Musk dictated his terms to directors, who were not sufficiently independent from their star CEO.
He also accused Musk of "unjustified enrichment" and asked for the annulment of a pay program that helped make the entrepreneur the richest man in the world.
During a trial in 2022, Musk countered that investors in Tesla were some of the "most sophisticated in the world."
He said Tesla had been the laughingstock of the auto industry, and it was only the massive success of the company's Model 3 that turned things around.
Musk insisted that he played no role in coming up with the package nor discussed his deal with the board members, some of them close friends, who ultimately signed off on it.
