Musk blasts judge as he loses record $56BN Tesla pay package after she rejected it for a second time despite shareholder approval
The payout, which came in the form of Tesla stock options, made Musk the richest man in the world. The package is now worth more around $100bn, following a major Tesla share price rally in recent weeks.
Judge Kathaleen McCormick upheld her January decision, in which she ruled that Tesla’s board members were too heavily influenced by Musk and that shareholders weren’t properly informed of the CEO’s pay package.
McCormick stood by her decision even after Musk and Tesla’s lawyers argued that a shareholder vote in June in which 75% of shareholders agreed to give Musk the payout cleared the way for the payout to go through.
She said Tesla lawyers could not flip a decision using ‘evidence they created after trial.’
Musk furiously said on X following the judge’s ruling: ‘Shareholders should control company votes, not judges.’
Tesla added in a statement: ‘A Delaware judge just overruled a supermajority of shareholders who own Tesla and who voted twice to pay Elon Musk what he’s worth. The court’s decision is wrong, and we’re going to appeal.
‘This ruling, if not overturned, means that judges and plaintiffs’ lawyers run Delaware companies rather than their rightful owners – the shareholders.’
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Tesla chief Elon Musk (pictured) has slammed a judge’s decision to rescind his $56billion pay package for a second time
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Judge Kathaleen McCormick (pictured) upheld her January decision
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McCormick said her her ruling that the June vote was flawed as Tesla’s board presented ‘materially misleading’ information to shareholders, telling them that they should not have told them that a new vote would change the outcome of the case.
McCormick also ordered Tesla to pay $345 million in fees to the lawyers who represented the shareholders who brought the case, much less than the $5.6 billion that the lawyers had sought.
Despite this, the lawyers, from firm Bernstein Litowitz Berger & Grossmann, said in a statement: ‘“We hope that the chancellor’s well-reasoned decision will end this matter for the shareholders of Tesla.’
The lawyers added that they would be happy to defend the judgement if Tesla appealed it in the Delaware Supreme Court.
Last month, Tesla stocks surged after rumours that Donald Trump would adopt a federal framework for self-driving cars spread like wildfire.
Bloomberg first reported the news that members of the Trump transition team have told advisers that they plan to make autonomous vehicles one of the Transportation Department’s priorities.
The Trump team is also reportedly searching for policy minds to think up a way to regulate self-driving vehicles.
During an earnings call last month, Musk said he believes the future is automated electric vehicles.
Donald Trump, Elon Musk, and Dana White fist bump to USA chant
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Elon Musk just notched a major win for Tesla as it’s been reported that Donald Trump advisers want the Transportation Department to adopt rules for self-driving cars
This comes after Musk has fully embraced Trump by donating tens of millions to his campaign, speaking enthusiastically at his rallies and now leading a proposed government agency aiming to cut trillions in federal spending.
Musk, who owns close to 13 percent of Tesla’s outstanding shares, will certainly benefit from the incoming administration’s new stance on self-driving.
Musk got $15 billion richer immediately after Trump’s historic election victory thanks to Tesla’s stock rising, making him worth well over $300 billion, according to the Bloomberg Billionaires Index.
Tesla stock has appreciated by nearly 30 percent since Trump defeated Vice President Kamala Harris.
As it stands, the federal government has put up significant red tape for companies like Tesla who want to sell vehicles without steering wheels or foot pedals at an industrial scale.
All of Tesla’s vehicles still have steering wheels and foot pedals, but come with the ability to turn on autopilot, which allows the car to steer for you within lanes.
Most newer Teslas come with full self driving, which is more autonomous than autopilot. On this mode, the car can merge onto highways, change lanes and park automatically.
However, the system hasn’t been perfected yet, and there have been several serious reported mishaps.
