Remember, in June 2024, Tesla shareholders approved Elon Musk’s new compensation plan at Tesla. This choice followed a first annulment by the American courts. The latter should have allowed the leader to receive up to 56 billion dollars (at current prices, it is even 100 billion dollars).
But, as we indicated to you then, this vote still remained pending a court decision. The Delaware judge who had canceled the first plan had to render her final verdict. His decision is now known and it is not in favor of Elon Musk.
New snub for Elon Musk
Judge Kathaleen St. J. McCormick of the Delaware Court of Chancery therefore once again cancels this plan to remunerate the billionaire. In its decision rendered in January following a complaint from a shareholder, it considered that “The process leading to approval of Musk’s compensation plan was deeply flawed. »
Now, she emphasizes that a “shareholder vote alone cannot ratify a conflicting control transaction”. She adds that a major shareholder has influence on the board of directors and its decisions. Tesla would also have presented information “materially misleading” to shareholders in the statement urging them to vote for Elon Musk’s compensation plan.
Called into question, Tesla reacted on X (also owned by Elon Musk): “A Delaware judge just overturned a supermajority of shareholders who own Tesla and who voted twice to pay Elon Musk what he deserves. This decision, if not overturned, means that judges and plaintiffs’ attorneys rule Delaware.” The manager continued in the same tone: “Shareholders should control the company’s votes, not judges. »
According to the New York TimesTesla’s board will likely try to shape a new compensation system that will this time fall under the jurisdiction of Texas and not Delaware where the company was previously registered. The manufacturer will, however, always be at the mercy of legal challenges, according to the experts consulted by our colleagues.
Keeping Elon Musk at Tesla
As a reminder, in her argument to justify Elon Musk’s colossal remuneration, Robyn Denholm, chairman of the board of directors of Tesla, estimated in a letter addressed to shareholders:
What we recognized in 2018 and continue to recognize today is that one thing Elon definitely does not have is unlimited time. Nor does he face a shortage of ideas and other places where he can make an incredible difference in the world. We want these ideas, this energy and this time to be devoted to Tesla, for the benefit of you, our owners. But this requires mutual respect.
More information on this in our previous article here.
