A recent court ruling has once again rejected Elon Musk’s massive $56 billion compensation package, despite Tesla shareholders voting to reinstate it in June. The judge, Kathaleen McCormick, blocked the plan, citing Musk’s undue influence over Tesla’s board of directors. This decision comes as a blow to Musk, whose compensation package is now valued at an astonishing $101 billion based on Tesla’s closing share price on Monday, making it a record-breaking pay package for the CEO. It’s worth noting that Musk is also known for his advocacy of Dogecoin (DOGE).
In response to the court’s ruling, Tesla took to X post (formerly Twitter) on December 3rd to express their disagreement. The company stated that the court’s decision went against the wishes of the majority of shareholders who had voted twice to approve Musk’s compensation. Tesla plans to appeal the decision, arguing that it sets a dangerous precedent by giving judges and lawyers excessive power over Delaware-based companies, potentially stripping away control from the true owners of these companies.
The court’s decision to reject Musk’s compensation package for the second time comes after it was initially revoked in January due to its exorbitant nature, which was deemed unfair to shareholders. Judge McCormick emphasized that Musk’s influence over the board played a significant role in the approval of the compensation deal, leading to terms that were not deemed entirely fair. She highlighted that the board failed to fully inform investors before approving the package and could have chosen a more reasonable compensation amount instead of simply acquiescing to Musk’s demands.
The lawsuit challenging Musk’s compensation package was brought forth by shareholder Richard Tornetta, who will receive $345 million in fees from Tesla to cover his legal expenses. This amount is to be paid in either cash or company shares. Following Tesla’s legal setback, Dogecoin experienced a 3.36% drop in value over the last 24 hours. Despite this, the token has seen a significant increase of 180% over the past 30 days.
It is important to note that the information presented in this article is for informational and educational purposes only and should not be considered financial advice. Readers are advised to exercise caution and conduct their own research before making any investment decisions.