Delaware judge refuses to reinstate Elon Musk's $56 billion Tesla pay

Yahoo Finance12-03

The Delaware judge who denied Tesla (TSLA) CEO Elon Musk a $56 billion compensation package once did so for a second time on Monday, dealing a fresh legal defeat to the billionaire as he prepares for ...

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It could also raise new concerns about Musk's motivations to give as much time as he has to Tesla.Even before the 2018 pay package was invalidated by the Delaware court, Musk's attention was divided between his ventures SpaceX, X.com , and the Boring Co., among other pursuits.Elon Musk speaks at a campaign rally, Oct. 27, in New York. . McCormick said Musk and the defendants put forth the \"exact same\" pay plan that she found had breached the duty of loyalty that board members owe to their shareholders, by law. That breach centered on Musk's conflict of interest with board members who vo","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU0348723411.USD":"ALLIANZ GLOBAL HI-TECH GROWTH \"A\" (USD) INC","BK4598":"佩洛西持仓","BK4592":"伊斯兰概念","LU2357305700.SGD":"Allianz Global Artificial Intelligence ET H2-SGD","LU0234570918.USD":"高盛全球核心股票组合Acc Close","LU1429558221.USD":"Natixis Loomis Sayles US Growth Equity RA USD","LU1839511570.USD":"WELLS FARGO GLOBAL FACTOR ENHANCED EQUITY \"I\" (USD) ACC","LU2023250330.USD":"ALLIANZ INCOME AND GROWTH \"AMG\" (USD) INC","SG9999015952.SGD":"LIONGLOBAL DISRUPTIVE INNOVATION \"I\" (SGD) ACC","LU0823411888.USD":"法巴消费创新基金 Cap","LU1435385759.SGD":"Natixis Loomis Sayles US Growth Equity RA SGD-H","LU2213496289.HKD":"ALLIANZ INCOME AND GROWTH \"AT\" (HKD) ACC","BK4534":"瑞士信贷持仓","LU1551013342.USD":"Allianz Income and Growth Cl AMg2 DIS USD","BK4555":"新能源车","IE00B1XK9C88.USD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A\" (USD) ACC","BK4533":"AQR资本管理(全球第二大对冲基金)","LU0719512351.SGD":"JPMorgan Funds - US Technology A (acc) SGD","BK4548":"巴美列捷福持仓","IE00BJLML261.HKD":"HSBC GLOBAL EQUITY INDEX \"HCH\" (HKD) ACC","LU0820561909.HKD":"ALLIANZ INCOME AND GROWTH \"AM\" (HKD) INC","LU0234572021.USD":"高盛美国核心股票组合Acc","LU1914381329.SGD":"Allianz Best Styles Global Equity Cl ET Acc H2-SGD","LU0820562030.AUD":"ALLIANZ INCOME AND GROWTH \"AMH2\" (AUDHDG) H2 INC","LU2063271972.USD":"富兰克林创新领域基金","LU2756315664.SGD":"ALLIANZ INCOME AND GROWTH \"AMI\" (SGDHDG) INC","BK4588":"碎股","BK4550":"红杉资本持仓","TSLA":"特斯拉","SG9999015945.SGD":"LionGlobal Disruptive Innovation Fund A SGD","IE00BWXC8680.SGD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5\" (SGD) ACC","LU1145028129.USD":"ALLIANZ INCOME AND GROWTH \"AQ\" (USD) INC","BK4574":"无人驾驶","BK4551":"寇图资本持仓","LU0466842654.USD":"HSBC ISLAMIC GLOBAL EQUITY INDEX \"A\" (USD) ACC","LU2087621335.USD":"ALLSPRING GLOBAL FACTOR ENHANCED EQUITY \"A\" (USD) ACC","LU0689472784.USD":"安联收益及增长基金Cl AM AT Acc","LU2326559502.SGD":"Natixis Loomis Sayles US Growth Equity P/A SGD-H","LU1852331112.SGD":"Blackrock World Technology Fund A2 SGD-H","LU0964807845.USD":"ALLIANZ INCOME & GROWTH \"A\" (USD) INC","LU1720051017.SGD":"Allianz Global Artificial Intelligence AT Acc H2-SGD","LU0198837287.USD":"UBS (LUX) EQUITY SICAV - USA GROWTH \"P\" (USD) ACC","BK4581":"高盛持仓","LU0316494557.USD":"FRANKLIN GLOBAL FUNDAMENTAL STRATEGIES \"A\" ACC","LU1548497426.USD":"安联环球人工智能AT Acc","LU0820561818.USD":"安联收益及增长平衡基金Cl AM DIS","LU1551013425.SGD":"Allianz Income and Growth Cl AMg2 DIS H2-SGD","LU1861220033.SGD":"Blackrock Next Generation Technology A2 SGD-H","BK4099":"汽车制造商","TSLL":"Direxion Daily TSLA Bull 2X Shares"},"translate_title":"特拉华法官拒绝恢复Elon Musk 560亿美元特斯拉薪酬","themeId":"9a58bfd72727c11f61c8a72bfcd2c859","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"TSLL":1,"TSLA":1},"content_text":"The Delaware judge who denied Tesla (TSLA) CEO Elon Musk a $56 billion compensation package once did so for a second time on Monday, dealing a fresh legal defeat to the billionaire as he prepares for a major role in President-elect Donald Trump’s new administration.\nThe ruling all but assures another court battle over Musk’s historic pay pact that legal experts expect could go all the way to the Supreme Court. It could also raise new concerns about Musk's motivations to give as much time as he has to Tesla. \nEven before the 2018 pay package was invalidated by the Delaware court, Musk's attention was divided between his ventures SpaceX, X.com (formerly Twitter), and the Boring Co., among other pursuits. \n\n\n\n  Elon Musk speaks at a campaign rally, Oct. 27, in New York. (AP Photo/Evan Vucci, File)\n \n\n  ASSOCIATED PRESS\n \n\nAnd now he is set to play a central role in Trump's new cost-cutting efforts as part of the extra-governmental \"Department of Government Efficiency\" (DOGE).\nChancellor Kathaleen McCormick of the Court of Chancery initially voided the pay pact in January because of what she called \"extensive ties\" between Musk and the people negotiating the pay package and a lack of public disclosure about Musk’s relationships with those who approved the deal.\nTesla stock holders then approved the pay package a second time in June after an aggressive public-relations campaign that featured an open letter from Tesla chair Robyn Denholm. \nShe told stockholders that \"fairness and respect require that we honor the collective commitment we made to Elon — a commitment that was, and fundamentally still is, about retaining Elon’s attention and motivating him to focus on achieving astonishing growth for our company.\"\nStockholders voted overwhelmingly in favor of the pact again. \"Hot damn, I love you guys,\" Musk told stockholders after the votes were tabulated.\nTesla argued that additional stamp of approval should be enough for McCormick to toss out her initial decision.\n\n\n\n  Delaware Chancellor Kathaleen St. Jude McCormick, who has now ruled against Elon Musk's pay package twice. (Eric Crossan via AP)\n \n\n  ASSOCIATED PRESS\n \n\nMcCormick disagreed with Tesla's argument, saying in her Monday opinion that Musk and member of Tesla's board made creative, yet fatally flawed, arguments in favor of a second vote curing the problems that unwound the initial vote.\nMcCormick said Musk and the defendants put forth the \"exact same\" pay plan that she found had breached the duty of loyalty that board members owe to their shareholders, by law. That breach centered on Musk's conflict of interest with board members who voted for the initial shareholder vote.\n\"[A] stockholder vote standing alone cannot ratify a conflicted-controller transaction,\" McCormick said.\nThe judge went on to say that the second vote was also invalid due to multiple, material misstatements in Tesla's proxy statement.\nTesla, McCormick said, inaccurately told stockholders that her first decision got Delaware law wrong and that their vote would \"fix\" it.\nTesla did not respond to a request for comment on Chancellor McCormick’s decision. The company's stock fell in after-hours trading after rising more than 3% Monday.\nIn reaching both decisions, McCormick sided with a group of Tesla shareholders who brought a derivative lawsuit against Tesla’s board, claiming that the initial executive compensation award was reached in violation of corporate law.\nWhen Tesla asked its stockholders to approve the pay pay for a second time in June, it argued it had cured the conditions that led McCormick to void Musk’s compensation.\nIt did so, the board claimed, by forming a single-member special committee to evaluate Musk’s pay package using independent director Kathleen Wilson-Thompson — and by following Wilson-Thompson’s recommendation for a new shareholder vote that came after third parties assisted the company with \"rigorous and thoughtful analysis.\"\nTesla and Musk are expected to appeal the decision. If an appeal is filed the case will next move on to Delaware’s Supreme Court.\nMcCormick, however, didn't give the attorneys who helped bring the lawsuit against Musk's pay everything they wanted, either.\nThose plaintiffs attorneys argued they should be paid more than $5 billion in legal fees. She instead awarded $345 million.\nThat amount, McCormick said, is \"an appropriate sum to reward a total victory.\"\nAlexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on X @alexiskweed.\nClick here for in-depth analysis of the latest stock market news and events moving stock prices\nRead the latest financial and business news from Yahoo Finance","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"-1","news_tag":"executive","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2488796355"}