Elon Musk's massive $56 billion compensation package as CEO of Tesla has been rejected again by a Delaware court, despite receiving approval from shareholders. Judge Kathaleen McCormick ruled that the compensation plan was not fair to shareholders, emphasizing that Musk and the board failed to demonstrate its fairness. This ruling follows a previous rejection in January, where the judge noted the close ties between Musk and the board members involved in negotiating his pay package.
The compensation package consists of 303 million stock options, which, at current market prices, could be valued at over $100 billion. However, the judge criticized the approval process, stating it was deeply flawed due to Musk's extensive relationships with the compensation committee members. McCormick pointed out that while Musk is entitled to compensation, the board capitulated to his demands without establishing fairness to shareholders.
The judge's latest decision also awarded $345 million to the shareholder's lawyer involved in the lawsuit against Musk's compensation plan. Following the ruling, Tesla's shares experienced a slight decline in electronic trading.
