Legal Battle over Musk's $56 Billion Tesla Pay Package Heats Up

A Delaware judge has permitted Elon Musk and Tesla to appeal a ruling that annulled Musk’s substantial $56 billion pay package. This opens a chance for further legal proceedings, as the company aims to counteract accusations of fiduciary breaches linked to the 2018 compensation agreement.

A Delaware judge paved the way for Elon Musk and Tesla to begin legal appeals against a ruling that voided the chief executive's massive $56 billion pay package from the electric automaker. Chancellor Kathaleen McCormick of the Court of Chancery has opened a 30-day window for an appeal to the Delaware Supreme Court.

The appeal comes in response to McCormick's January decision that criticized the 2018 compensation package as overly generous and in breach of fiduciary duty to investors. Despite a shareholder vote in June supporting the package, McCormick refused to reconsider her ruling on December 2.

In addition, Tesla will appeal McCormick's directive to pay $345 million to the attorneys representing shareholder Richard Tornetta, who filed the lawsuit seeking to annul the pay package. It will likely take about a year for the Delaware Supreme Court to deliver a verdict on the appeal.

(With inputs from agencies.)