Tesla boss Elon Musk criticized a judge’s decision to rescind his $56 billion pay package for the second time, despite it being approved by shareholders and directors.
The payment, which came in the form of Tesla stock options, made Musk the richest man in the world. The package is now worth more than about $100 billion, following a significant rally in Tesla’s share price in recent weeks.
Judge Kathaleen McCormick upheld her January decision, in which she ruled that Tesla board members were overly influenced by Musk and that shareholders were not adequately informed about the CEO’s pay package.
McCormick stood by his decision even after Musk and Tesla lawyers argued that a shareholder vote in June in which 75% of shareholders agreed to give Musk the payment paved the way for the payment to take place.
He said Tesla’s lawyers could not overturn a decision using “evidence they created after the trial.”
Musk angrily said on X after the judge’s ruling: “Shareholders should control the company’s votes, not judges.”
Tesla added in a statement: “A Delaware judge just overruled a large majority of Tesla shareholders who owned and voted twice to pay Elon Musk what he’s worth.” The court’s decision is wrong and we are going to appeal.
“This ruling, if not overturned, means that judges and plaintiffs’ attorneys are running Delaware companies instead of their rightful owners: shareholders.”
Tesla boss Elon Musk (pictured) criticized a judge’s decision to rescind his $56 billion pay package for the second time.
Judge Kathaleen McCormick (pictured) upheld her January decision
McCormick said his ruling that the June vote was erroneous as Tesla’s board of directors presented “materially misleading” information to shareholders, telling them they should not have been told that a new vote would change the outcome of the case.
McCormick also ordered Tesla to pay $345 million in fees to lawyers who represented the shareholders who brought the case, far less than the $5.6 billion the lawyers had requested.
Despite this, lawyers from the law firm Bernstein Litowitz Berger & Grossmann said in a statement: “We hope that the Chancellor’s well-reasoned decision will put an end to this matter for Tesla shareholders.”
The lawyers added that they would be happy to defend the ruling if Tesla appealed it to the Delaware Supreme Court.
Last month, Tesla shares rose after rumors that Donald Trump would adopt a federal framework for autonomous vehicles spread like wildfire.
Bloomberg first reported the news that members of Trump’s transition team told advisers they plan to make autonomous vehicles one of the Department of Transportation’s priorities.
Trump’s team is also reportedly looking for political minds to come up with a way to regulate autonomous vehicles.
During an earnings call last month, Musk said he believes the future is automated electric vehicles.
Elon Musk just scored a big win for Tesla, as it was reported that Donald Trump’s advisers want the Department of Transportation to adopt rules for autonomous vehicles.
“In the future, non-autonomous gasoline vehicles will be like riding a horse and using a flip phone,” he said.
This comes after Musk has fully embraced Trump by donating tens of millions to his campaign, speaking enthusiastically at his rallies and now leading a proposed government agency that aims to cut trillions in federal spending.
Musk, who owns about 13 percent of Tesla’s outstanding shares, will undoubtedly benefit from the incoming administration’s new stance on autonomous driving.
Musk became $15 billion richer immediately after Trump’s historic election victory thanks to Tesla’s stock surge, making him worth more than $300 billion, according to the Bloomberg Billionaires Index.
Tesla shares have appreciated nearly 30 percent since Trump defeated Vice President Kamala Harris.
As things stand, the federal government has imposed significant red tape for companies like Tesla that want to sell vehicles without steering wheels or pedals on an industrial scale.
All Tesla vehicles still have steering wheels and pedals, but they have the ability to activate Autopilot, allowing the car to drive for you within lanes.
Most newer Teslas come with fully self-driving, which is more autonomous than Autopilot. In this mode, the car can merge onto highways, change lanes and park automatically.
However, the system has not yet been perfected and several serious mishaps have been reported.