A Delaware court has ruled against Elon Musk’s $56 billion compensation package from Tesla, despite the approval of shareholders earlier this year.
Chancellor Kathaleen McCormick of the Delaware Court of Chancery stated that the tech billionaire is not entitled to the massive payout, marking a significant decision in the electric vehicle manufacturer’s history.
In January, the judge described Musk's compensation as excessive, a stance reaffirmed in this latest ruling. This decision has shocked Tesla investors and raised questions about Musk’s future at the helm of the world’s most valuable carmaker.
In response to the ruling on X (formerly Twitter), Musk expressed disagreement, saying, "Shareholders should control company votes, not judges." Tesla echoed Musk's stance, calling the ruling "wrong" and announcing plans to appeal.
The company also highlighted that a supermajority of its shareholders supported the package in a vote conducted in June, arguing that this approval should carry significant weight in court decisions.
Tesla can appeal the ruling to the Delaware Supreme Court, with a final order expected soon. The company maintains that Musk’s leadership has been instrumental in Tesla’s growth and innovation, urging the court to reinstate his compensation package based on shareholder backing.
The legal battle over Musk’s pay package is far from over, as Tesla prepares to challenge the ruling.
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