Verdict
Elon Musk still has to forego his $56 billion bonus
Copy the current link
In June, Tesla shareholders again agreed to a share package worth billions for Musk. But a judge sees it differently.
Despite the support of Tesla shareholders, a court continues to oppose an agreed salary for CEO Elon Musk worth billions. Judge Kathaleen McCormick in the US state of Delaware on Monday stood by her decision in January that the company’s boss had too much influence in the background when agreeing on the stock grant plan in 2018.
After the verdict, Musk commented in a post “X”that shareholders should control the company’s votes, not judges. Tesla released a statement on “X” in which the company wrote: “The verdict is wrong and we will appeal.” Musk and Tesla can appeal to the Delaware Supreme Court, which could happen as soon as this week. However, the appeal could drag on for more than a year.
The compensation plan was originally intended to have a total value of $2.6 billion, but due to the sharp rise in Tesla’s share price, this had increased to $56 billion by the time of the initial decision. Based on Monday’s closing price, the value would be more than $100 billion.
Tesla shareholders left in the dark
The judge concluded earlier this year that Musk had close relationships with members of the Tesla board of directors with whom he negotiated the generous compensation. However, the shareholders were left in the dark about the involvement before the first vote. This meant that they would not have had the opportunity to make a well-considered decision, the judge explained her verdict at the time. She therefore supported the plaintiff, who wanted to cancel the agreement with Musk.
Tesla shareholder Richard Tornetta sued against the remuneration. He argued in court that the goals set for Musk were easy to achieve. Musk was not even required to dedicate his full time to the car manufacturer. Even back then, he was only a part-time boss, as he also ran the space rocket company SpaceX. Musk later also bought the online platform Twitter, which he then renamed X.
McCormick also thwarted the lawyers who challenged Musk’s billions in remuneration. She ordered Tesla to pay those lawyers $345 million. The three law firms involved in the process had demanded a fee of seven billion dollars.
In June, Tesla shareholders actually approved the huge share package again, but that didn’t automatically mean that Musk would get justice in court. However, even without the compensation package, Musk would remain the world’s richest person.
Tesla shares benefit from Musk’s proximity to Trump
Tesla shares fell by a good two percent to around $349 in after-hours US trading on Monday. Earlier this year, when the judge made her first decision, the papers had cost less than $200.
Tesla shares had recently benefited from Musk’s proximity to US President-elect Donald Trump. Among other things, investors are betting on the creation of a government framework for fully self-driving vehicles, which could then also benefit Tesla’s robotaxi. As a result of the price gains, Tesla’s market value rose again to more than $1.1 trillion.
DPA · Reuters
ch
Source: Stern

I’m a recent graduate of the University of Missouri with a degree in journalism. I started working as a news reporter for 24 Hours World about two years ago, and I’ve been writing articles ever since. My main focus is automotive news, but I’ve also written about politics, lifestyle, and entertainment.