WASHINGTON: A US decide on Monday (Dec 2) upheld her choice to reject Elon Musk’s huge US$55.8 billion compensation bundle at Tesla, denying an try to revive the pay deal by way of a shareholder vote.
In a court docket submitting, Chancellor Kathaleen McCormick of Delaware’s Courtroom of Chancery dominated that Tesla’s try and ratify Musk’s compensation bundle by way of a June shareholder vote couldn’t override her January choice placing down the bundle as extreme and unfair to shareholders.
McCormick discovered a number of flaws in Tesla’s ratification try, together with “materials misstatements” in paperwork supplied to shareholders concerning the impact of their vote.
“The movement to revise is denied,” McCormick wrote.
“The big and gifted group of defence corporations acquired artistic with the ratification argument, however their unprecedented theories go in opposition to a number of strains of settled regulation,” she added.
In an announcement on Musk’s X social media platform, Tesla mentioned it might attraction the decision.
“Shareholders ought to management firm votes, not judges,” mentioned Musk, in a separate submit.
The court docket additionally awarded US$345 million in legal professional charges, considerably lower than the US$5.6 billion requested by the legal professionals of plaintiff Richard Tornetta, a Tesla shareholder.
Whereas acknowledging their calculation methodology was technically sound beneath Delaware regulation, which bases charges on the share of profit achieved, McCormick dominated that such a big award would represent an extreme windfall.
