Musk's $56B Tesla Pay Deal Rejected for Second Time
Delaware Chancery Court Judge Kathaleen St Jude McCormick has declined, for the second time, to reinstate Tesla Chief Executive Officer Elon Musk's record $56B salary award.
Facts
- Delaware Chancery Court Judge Kathaleen St Jude McCormick has declined, for the second time, to reinstate Tesla Chief Executive Officer Elon Musk's record $56B salary award.[1]
- Following shareholder and director acceptance of the salary award in June, Tesla stated that the most recent decision was "wrong" and that shareholders are the rightful owners of Delaware companies — not judges and plaintiffs' lawyers. Monday's decision follows months of legal wrangling.[2]
- After Musk requested that Delaware Chancery Court Judge McCormick reconsider her original decision, the judge concluded on Monday that the pay package was excessive and that Musk had inappropriately held influence over Tesla's board when it accepted his proposal in 2018.[3]
- Instead of a traditional salary, in 2018 Tesla presented a compensation package that awarded Musk stock options worth 1% of the company's equity upon the achievement of twelve predetermined operational and financial benchmarks.[4]
- After receiving the Tesla stock option dividend, Musk became the world's richest person. The package has exceeded $100B following a significant increase in Tesla shares in recent weeks.[5]
- In a post on the social media platform X, Tesla announced its plan to appeal the decision. In another post on X, Musk described the decision as "absolute corruption."[6]
Sources: [1]Al Jazeera, [2]BBC News, [3]World News, [4]USA Today, [5]Daily Mail and [6]CNBC.
Narratives
- Narrative A, as provided by Torque News. It is time for Tesla to respect its deal with its Chief Executive and pay what it owes. Musk deserves to be compensated for achieving Tesla's financial benchmarks and advancing the company into global prominence in the electric vehicle sector.
- Narrative B, as provided by Archive. Musk's pay is excessive and not in the interest of the company or its shareholders. Musk's proposed package actually results in Tesla shareholdings resembling more of a meme stock. The company must focus more on quality and improving business processes.
