A judge in the US state of Delaware has annulled a $55.8bn (£44bn) pay deal awarded to Elon Musk in 2018 by the electric car company Tesla.
The lawsuit was filed by a shareholder who argued that it was an overpayment.
Judge Kathaleen McCormick ruled that the Tesla board’s approval of the pay package was “deeply flawed.”
Judge Kathaleen McCormick ruled that the Tesla board’s approval of the pay package was “deeply flawed.”
The pay deal was the biggest ever in corporate history, helping to make Mr Musk one the richest people in the world.
During the week-long trial, Tesla directors argued the deal was made to ensure that one of the world’s most dynamic entrepreneurs continued to dedicate his attention to the company.
But the judge ruled that Tesla and Mr Musk’s attorneys “were unable to prove that the stockholder vote was fully informed”, and that he had “extensive ties with the persons tasked with negotiating on Tesla’s behalf”.
“Given the judge found Mr Musk to be in control of the board, it’s hard to justify a transaction like this,” Brian Quinn, a professor at Boston College Law School, told the BBC.
In a 201-page ruling, Judge McCormick called the compensation “an unfathomable sum” that was not fair to shareholders.
A judge in the US state of Delaware has annulled a $55.8bn (£44bn) pay deal awarded to Elon Musk in 2018 by the electric car company Tesla.
Judge Kathaleen McCormick ruled that the Tesla board’s approval of the pay package was “deeply flawed.”
The lawsuit was filed by a shareholder who argued that it was an overpayment.
The pay deal was the biggest ever in corporate history, helping to make Mr Musk one the richest people in the world.
Judge Kathaleen McCormick ruled that the Tesla board’s approval of the pay package was “deeply flawed.”
Judge Kathaleen McCormick ruled that the Tesla board’s approval of the pay package was “deeply flawed.”
The pay deal was the biggest ever in corporate history, helping to make Mr Musk one the richest people in the world.
During the week-long trial, Tesla directors argued the deal was made to ensure that one of the world’s most dynamic entrepreneurs continued to dedicate his attention to the company.
But the judge ruled that Tesla and Mr Musk’s attorneys “were unable to prove that the stockholder vote was fully informed”, and that he had “extensive ties with the persons tasked with negotiating on Tesla’s behalf”.
“Given the judge found Mr Musk to be in control of the board, it’s hard to justify a transaction like this,” Brian Quinn, a professor at Boston College Law School, told the BBC.
In a 201-page ruling, Judge McCormick called the compensation “an unfathomable sum” that was not fair to shareholders.
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