Tesla CEO Elon Musk loses bid to get $56 billion pay package reinstated
S E E D E D C O N T E N T
Tesla CEO Elon Musk lost his bid to get his 2018 CEO pay package reinstated on Monday when a Delaware judge upheld her prior ruling that the compensation plan was improperly granted.
The package, worth about $56 billion, was the largest compensation plan in U.S. history for a public company executive. Tesla said in a post on X, that it plans to appeal the ruling, which Musk, in a separate post on his social media site, called "absolute corruption."
In January, Chancellor Kathaleen McCormick voided the pay plan, ruling that Musk had individually "controlled Tesla" and dictated the terms of his compensation to a board that didn't fairly negotiate. She called the process leading to approval of that pay plan "deeply flawed."
Following the opinion, Tesla conducted a shareholder vote in June 2024 at its annual meeting in Austin, Texas, asking investors to "ratify" Musk's 2018 CEO pay plan. Musk's attorneys attempted to sway the judge to reverse her opinion after the trial, leaning on the results of that vote.
McCormick wrote in her opinion on Monday that, "Even if a stockholder vote could have a ratifying effect, it could not do so here." She added that, "Were the court to condone the practice of allowing defeated parties to create new facts for the purpose of revising judgments, lawsuits would become interminable."
As part of Monday's opinion, McCormick approved a $345 million attorney fee award for the lawyers who successfully sued on behalf of Tesla shareholders in order to void Musk's pay plan.
"We are pleased with Chancellor McCormick's ruling, which declined Tesla's invitation to inject continued uncertainty into Court proceedings and thank the Chancellor and her staff for their extraordinary hard work in overseeing this complex case," attorneys from Bernstein, Litowitz, Berger & Grossmann, the firm representing the plaintiff, said in a statement.
Following the January decision, Musk had lashed out at the Delaware court posting on X, "Never incorporate your company in the state of Delaware." Tesla then held a shareholder vote to reincorporate in Texas, and officially shifted its state of incorporation there.
Musk has also moved the state of incorporation for his defense contractor company SpaceX to Texas from Delaware.
Despite the legal setback, Musk has seen his net worth jump considerably in recent weeks. Excluding all of the options wrapped up in the pay package, Musk is more than $43 billion richer since Donald Trump's election victory last month. Tesla shares have soared 42% in the four weeks since the election on optimism that Musk's coziness with the incoming president will lead to policies favorable to his companies.
The Tesla stock Musk still holds is worth close to $150 billion based on Monday's closing price. That alone, not including his SpaceX stake, would put him among the world's wealthiest people. Equilar estimates that at today's stock price Musk's 2018 package would have risen to be worth $101.4 billion.
Lora Kolodny, CNBC
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Well Trump supporters, do you think Musk gives one shit about you and your little people problems?
Not at all.
Why would that matter?
well, he is practically living in our new Presidents head,,, yea nothing to see or worry about there,
Are you suggesting Trump would make more compassionate decisions without him?
Alternatively, are we suggesting Ms. Harris "gives one shit about us and our little people problems"?
I find either of those very difficult to believe.
It seems interesting that the one Trump advisor who is vocally pro immigration and pro green energy is now supposed to be some sort of villain.
Because he is in a crony relationship with the president-elect and has been given substantial authority to recommend changes to government services.
And while I am quite in favor of lean government in principle, the mindset of the top dog in charge of streamlining the government makes a difference.
Did you just use trmp and compassionate in the same sentence?
Several points:
I think of a very long list of other people who would be far worse advisors to Donald Trump.
As far as I can tell, most of the objection to Elon Musk comes from identity politics enthusiasts as a result of his acquisition of Twitter, and his public insistence that people be allowed to say things that deviate from approved hardcore liberal doctrine.
I agree with you as far as being in favor of lean government. Quite frankly, I'm not at all optimistic that even Elon Musk will be able to make much of a difference.
I know, right? My point exactly.
It's not like sweet grandfatherly old Donald Trump who cares about all of us like we're his grandchildren is going to be corrupted by super villain Elon and his evil machinations.
I agree with a lot of what you say. However, Musk is no proponent of free speech. When he took over twitter, he censored those he didn't like
I agree
Intelligence does not mean that the individual will make good decisions for the people. We want intelligence coupled with a responsible, rational mindset.
Yes. But my point was about Musk giving a shit about the little people. I did not categorically condemn Musk.
Yes. Same comment as above.
Yes. Same as above.
My criticism of Musk was regarding his lack of concern for the good of the masses. Thomas Edison was an asshole, but he did great things that did wind up benefiting the masses in major ways. He likely was more concerned with his joy of inventing and wealth than with people, but —as with Musk— his efforts did indeed contribute substantially to society in a good way.
I can see Musk being impatient with doing this DOGE job the right way per process reengineering / technology migration practices (takes a lot of analysis, a lot of time, very careful surgical moves in a phased implementation) and favoring instead the quicker hatchet and then fix things (or not) when the dust settles approach.
I confess I don't know anything about that, so I'll defer to you.
I know it was bad at Twitter before he bought it.
I think he has as much or more concern for the masses as anybody in Washington. That threshold is very very low.
The hatchet approach has certainly been his history with things like Twitter.
I agree he probably gets frustrated pretty early on . Frankly, I don't see him lasting in the role more than a year, for just that reason.
Yes, Elon Musk is not the only elitist on the planet.
Same here. He must get approval for his moves and that will be met with substantial political backlash. The dynamic will be interesting if Trump sides with Musk ... a test of the backbone of the new Trump-infused GOP.
It might be more interesting (from a TV drama perspective) if they have a very public falling out. It would make better television anyway.
That will almost certainly happen. The question is when.
a handful of massive egos that never hear the word no, what could go wrong ...
Pay Per View!
This poor man works so hard and is barely scraping by.
Those lawyers aren't suffering any, either.
345 million…
thats fucked up
The board needs to vote for that to come out of the shareholders dividend checks.
You are aware the Tesla doesn't pay a dividend, yes?
His level of greed and sense of entitlement is astronomical.
Musk calling the ruling "absolute corruption" is a clear signal that the ruling was, in reality, reasonable and appropriate.
He does know what corruption looks like. He sees it every morning in the mirror looking back at him
I really like it when some people think they're untouchable.
Canadian lawyers could not even DREAM about something like that.
Musk and his side kick will now seek to remove all federal court judges.
Surely not ALL of them, only the ones who don't kowtow to the "king".
stockholders should run the company, not judges.
My wife refuses to play Monopoly anymore. It’s because the last time we played she had extraordinary luck while I had extraordinary bad luck, and she ended up with all the hotels, all the properties, all the money, and all the promissory notes after I ended up giving up everything I had when I routinely landed on her properties loaded up with hotels. We were laughing about how we had to make up counterfeit money because the bank was emptied to her. She won’t play anymore because she can’t possibly top that win. It reminds me of the real life position Musk has found himself in.
Good! He's getting enough government money in contracts. By further worming his way into our government via flattery to Trump who lapped it up, he will far out earn that lousy "salary".