A Deleware court has rejected the Tesla pay package Elon Musk and his pet board of directors gave himself.
Recently, Elon whinged on about needing more stock and more control of Tesla, or he'd go make evil robots and dangerous self-driving software elsewhere. Now we know why: his pay package was pretty indefensible, and now he doesn't own nearly as much of Tesla as he did. While there is still room for an appeal, Musk will likely have to recast his compensation plan to something more reasonable.
A Delaware state court judge has thrown out the 2018 pay package that helped to make Tesla CEO Elon Musk one of the richest people in the world.
Delaware Chancery Court Chancellor Kathaleen McCormick, who oversaw the bench trial that concluded in November 2022, ruled Tuesday that Musk and the Tesla board "bore the burden of proving that the compensation plan was fair, and they failed to meet their burden."
The 303 million split-adjusted stock options that Musk had received as part of the package are worth $51 billion today, when calculated using Tuesday's closing price, less the modest exercise price of $23.34 a share.
The case was argued in Delaware, where Tesla and many other major US corporations are incorporated. While Musk did not have an immediate comment on the decision, he did tweet Tuesday, "Never incorporate your company in the state of Delaware."CNN