A judge in Delaware refused to reinstate the $56 billion salary package for Tesla CEO Elon Musk, despite recent shareholder backing. This ruling reaffirms the January ruling that struck down the deal, calling it excessive and pointing to irregularities in its approval.
The Role of Shareholders and Internal Tensions on Musk Case
Through a vote in June, shareholders sought to ratify Musk‘s compensation, arguing that his leadership has been key to Tesla‘s success. However, Judge Kathaleen McCormick dismissed this vote, noting that local law does not allow it to be used to overturn a court ruling.
The dispute has raised concerns among investors, who fear that Musk, recognized for his role in technological breakthroughs and Tesla‘s expansion, may decide to walk away from the company. This fear intensifies in the face of Musk‘s growing interest in projects outside Tesla, such as artificial intelligence.
Criticism of the Board of Directors
McCormick pointed out that Tesla‘s board, in approving the package in 2018, did not act with the necessary independence, as some of its members had close ties to Musk. According to the judge, this influenced the decision to grant a plan that she considered disproportionate, although the company argued that the CEO met the demanding targets proposed.
In addition to the rejection of the salary package, Tesla will have to pay $345 million in legal fees arising from the case. Although this figure is significantly less than the six billion initially requested, it represents a significant burden for the company.
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