Elon Musk vows to fight as his record £80bn pay deal with Tesla is rejected again

Elon Musk has vowed to continue his fight for a record £80bn paycheck from Tesla which has again been blocked by a judge.

In a ruling that infuriated the electric car giant’s billionaire chief executive, a Delaware court rejected the pay deal for a second time, even though shareholders approved it.

Judge Kathaleen McCormick’s decision, upholding a similar ruling in January, sparked an outburst of fury from Musk, the world’s richest man with a fortune of £279 billion.

“Shareholders should control the company’s votes, not judges,” he wrote on the social network X, which he owns. “Absolute corruption,” he said in a separate post.

Tesla said it would appeal the ruling, and a spokesperson added: “This ruling, if not overturned, means that judges and plaintiffs’ attorneys are running Delaware companies instead of their rightful owners: shareholders.”

The mammoth pay deal was drawn up in 2018 and was initially valued at £44bn. Backed by shareholders, it was tied to a number of milestones, including the company’s profits and Tesla’s stock price.

But it was overturned by the court in January in a case brought by a disgruntled investor, and McCormick ruled that the board that approved the deal was too influenced by Musk.

The judge described it as “the largest compensation scheme ever undertaken – an unfathomable sum”.

The value of the pay deal has since soared (partly due to the rise in Telsa’s share price since Donald Trump’s election victory last month) and is now worth £80bn.

But despite having the support of 75 percent of shareholders in a new vote in June, the judge again ruled that Musk, 53, was not entitled to the payment.

He argued that Tesla had failed to demonstrate that the package was fair and that Musk did not exert much influence over its board of directors.

As well as reducing the pay award, McCormick ordered Tesla to pay legal fees of £273m.

The dispute comes as Musk prepares to join President-elect Trump’s administration, having spent hundreds of millions of dollars supporting his campaign.

Musk has been put in charge of the Department of Government Efficiency along with fellow tycoon and former Republican presidential candidate Vivek Ramaswamy.

The commission, which will not be an official government department, has said its mission is to “dismantle government bureaucracy, trim excess regulations, cut unnecessary spending and restructure federal agencies.”

Dan Coatsworth, an investment analyst at brokerage AJ Bell, said: “It’s somewhat ironic that Musk now has an influential role in government efficiency.”

You’re looking for ways to save money and stop unnecessary spending, but you still think Tesla should line its pockets.

“It’s an obscene amount of money and will be seen as an insult to the tens of thousands of Tesla workers who likely earn a small fraction of that amount.”

Despite the defeat in Delaware, Musk could try to secure his excellent pay package by building a similar prize in the state of Texas, the location of one of his gigantic “gigafactories.”