Judge voids Elon Musk's 'unfathomable' $56 billion Tesla pay package

Judge voids Elon Musk's 'unfathomable' $56 billion Tesla pay package​

January 31, 20244:07 AM EST Updated 3 hours ago

WILMINGTON, Jan 30 (Reuters) - A Delaware judge tossed out Elon Musk's record-breaking $56 billion Tesla (TSLA.O), opens new tab pay package on Tuesday, calling the compensation granted by the EV maker's board "an unfathomable sum" that was unfair to shareholders.

Shares of Tesla dropped about 3% in extended trade, and some investors seized on the ruling in hopes it might prompt Tesla to overhaul its governance.

The Tesla board has been criticized as failing to provide oversight of its combative, headline-making CEO, who has fought regulators and led several other companies at the same time.

The ruling, which can be appealed, nullifies the largest pay package in corporate America. The judge found the share-based compensation was negotiated by directors who appeared beholden to Musk, currently ranked by Forbes magazine as the world's richest person.

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Musk seeks Tesla shareholder vote on moving incorporation to Texas​

February 1, 20248:12 AM EST Updated an hour ago

Feb 1 (Reuters) - Tesla (TSLA.O), opens new tab CEO Elon Musk said on Thursday the company will hold a shareholder vote to transfer its state of incorporation to Texas from Delaware, days after a judge invalidated his $56 billion pay package at the electric vehicle (EV) maker.

On Tuesday, Delaware judge Kathaleen McCormick called the 2018 share-based pay package, the largest in corporate America, "an unfathomable sum" that was unfair to shareholders and found it was negotiated by directors who appeared beholden to Musk.

"Never incorporate your company in the state of Delaware," Musk posted on social media X shortly after the ruling.

Musk's idea, should he actually go through with the vote, is not without risk. Legal experts said Musk would almost certainly be sued by investors if he tried to move the state of incorporation to Texas, particularly if it was seen as a move to secure his pay package rather than obtain some benefit for Tesla.

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UPDATE 2-Lawyers who voided Elon Musk's pay as excessive want $6 bln fee​

WILMINGTON, Delaware, March 1 (Reuters) - The lawyers who voided Elon Musk's $56 billion compensation as excessive on Friday sought a record a $6 billion legal fee, payable in the electric car maker's stock.

"We recognize that the requested fee is unprecedented in terms of absolute size," the three law firms said in a filing with the Court of Chancery in Delaware.

The fee works out to an hourly rate of $288,888, they said.

Musk blasted the request as "criminal," posting on his X platform that "the lawyers who did nothing but damage Tesla want $6 billion."

Tesla and Musk's attorney did not immediately respond to requests for comment.

The company would pay the lawyers who represented Richard Tornetta, a shareholder who sued Musk in 2018 over the pay package, which a Delaware judge nixed in January.

The electric vehicle maker is being asked to pay the fee because it benefited from the return of Musk's pay package, which the legal team said will result in the return to the carmaker of 266 million shares.

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Musk says Tesla shareholders voting yes for his $56 billion pay package​

June 12 (Reuters) - Tesla (TSLA.O), opens new tab shareholders are voting to approve a $56 billion pay package for Elon Musk and to move the electric vehicle maker's legal home to Texas, the CEO said on social media on Wednesday, adding that passage was by wide margins, opens new tab.

"Thanks for your support!!" Musk said in his post on X.

Overwhelming shareholder approval of the largest remuneration terms in U.S. corporate history could allay investor concerns about Musk's future at the company, while giving the electric carmaker ammunition in its fight to reverse a court decision to void the pay package.

Tesla shares were up 6.6% in premarket trading on Thursday after rising 3.9% a day before the shareholder meet.

Musk would still face a lengthy legal battle to convince the Delaware judge who said the Tesla board was "beholden" to him, while potentially fielding fresh lawsuits over the latest vote.

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Tesla CEO Musk's pay package gets support from 77% of votes at investor meet​

SAN FRANCISCO, June 14 (Reuters) - Elon Musk's $56 billion pay package won an overwhelming 77% of votes cast by Tesla (TSLA.O), opens new tab investors at its annual meeting, a company filing showed on Friday, despite vocal opposition from a number of institutional investors and proxy advisory firms.

The filing did not break down the vote based on the type of investor, but it underscored the support that Musk enjoys from retail investors, many of whom are fans of the mercurial billionaire.

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Public policy favors $7 billion fee award in Musk pay case, Tesla shareholder's lawyer says​

WILMINGTON, Delaware, July 8 (Reuters) - A record $7 billion in attorneys' fees for three firms that successfully challenged Elon Musk's $56 billion Tesla pay package provides an incentive for lawyers to hold corporate boards accountable, an attorney for a company shareholder told a Delaware judge on Monday.

For more than six hours, legal teams for the company and a shareholder sparred over how much to award to three law firms which represented Richard Tornetta, who owned nine shares of Tesla when he sued over Musk's pay package in 2018.

The fee Tornetta has asked for on behalf of the firms equals around $7.3 billion at Tesla's Monday stock price and amounts to a rate of roughly $370,000 for every hour worked by the 37 lawyers, associates and paralegals, court documents submitted by Tornetta's lawyers showed.

John Reed, Tesla's lawyer, said on Monday that the fee petition never should have been filed.

"It looks like a real-life lawyer joke," he told Chancellor Kathaleen McCormick of the Court of Chancery.

So the lawyers argue against Elons huge pay package of 56 billion while wanting to engorge themselves with their own huge pay package of 7 billion. They have created nothing but feel they should be paid 370,000 an hr for doing so.