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

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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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https://www.reuters.com/legal/judge-rules-favor-plaintiffs-challenging-musks-tesla-pay-package-2024-01-30/

 

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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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https://www.reuters.com/business/autos-transportation/tesla-take-shareholder-vote-shifting-incorporation-texas-musk-says-2024-02-01/

 

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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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