Musk's Mega Pay Package: Courtroom Clash Continues

A Delaware judge ruled Tesla's CEO Elon Musk is not entitled to a $56 billion compensation package, despite a shareholder vote to reinstate it. The decision, led by Chancellor Kathaleen McCormick, emphasizes concerns about Musk's control over the board and conflicts of interest, creating uncertainty for Tesla's future.

A Delaware court has once again denied Tesla CEO Elon Musk his $56 billion compensation package, despite a shareholder vote in favor of reinstatement. The ruling by Chancellor Kathaleen McCormick maintains her previous stance, citing the package as excessive and highlighting ongoing concerns about conflicts of interest within Tesla's board.

In response to the decision, which has thrown Tesla's future into question, the company urged the court to validate the shareholders' June vote, emphasizing Musk's pivotal role in the company's success. Tesla's representatives argued that the compensation was justified due to Musk's achievements in driving market value, revenue, and profitability advancements.

The controversy stems from shareholder Richard Tornetta's 2018 lawsuit, claiming Musk controlled the board's negotiation process for the pay package. McCormick criticized the board for its close ties to Musk and labeled the package as the 'biggest compensation plan ever.' The court ordered Tesla to pay $345 million to the attorneys who challenged the package, a fraction of their $6 billion request.

(With inputs from agencies.)