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The longtime case of deciding the fate of Elon Musk‘s $55 billion Tesla compensation plan finally reached a close. In 2018, Tesla’s Board of Directors voted to award Elon a bogus compensation plan, which remains the largest in public corporate history to date. The multi-billion dollar compensation that made the CEO the richest man in the world availed Elon the opportunity to secure 12 tranches of Tesla stock, ultimately setting him up for higher financial prospects in the near future. One shareholder, Richard Tornetta, wasn’t satisfied with the outcome, ultimately filing a lawsuit against Elon at the Delaware Chancery Court.
Elon Musk Loses Delaware Lawsuit Over $55 Billion Tesla Pay Package
The lawsuit described the compensation plan as “excessive,” also alleging that the mogul’s influence on Tesla swayed the board’s decision his way. Richard also accused the board of breaching their “fiduciary duties.”
After years of trial, a Delaware judge finally ruled in support of the shareholder, voiding Elon Musk’s claim to the $55.8 billion Tesla pay package. In her ruling on Tuesday, the judge pointed out that the tech giant’s board failed to offer a valid argument that validates the compensation plan as fair. The ruling read in part,
“The compensation plan is subject to review under the entire fairness standard. The defendants bore the burden of proving that the compensation plan was fair, and they failed to meet their burden.”
The judge went on to declare that the plaintiff was entitled to a rescission. Although the Delaware court gave room to appeal the ruling, the Tesla board of directors would most likely draft out a new compensation plan for Elon Musk as mandated. Ultimately, Elon’s net worth is expected to take a huge dip, shooting him down the scale behind Bernard Arnault and Jeff Bezos.
Elon Lashes Out on Twitter
Predictably, the tech mogul isn’t the least bit happy with the court’s decision to void his paycheck. Taking to X, formerly Twitter, in the wake of the ruling, Elon Musk took a stab not only at the judge behind the ruling but also at the entire “state” of Delaware. He tweeted,
“Never incorporate your company in the state of Delaware.”
His statement received thousands of reactions within hours, causing a stir. Many netizens criticized him for trying to “play God” by trying to have so much control over everything, including the fate of Delaware. Several who knew the backstory behind the tweet shared the billionaire’s sentiments. They turned to the platform to support Elon, slamming the judge’s ruling. One X user wrote,
“Disgusting ruling. A disgruntled shareholder can bring suit against CEO’s compensation rate and a judge can determine salary. Anti-American. Anti-free market.”
Many netizens rallied behind Elon Musk, voicing their willingness to boycott Delaware in their future corporate dealings. It seems to be too severe a repercussion for the actions of one judge, but avenging Elon appears to top the agenda for now, voiding all attempts at reason.