Tesla is asserting that CEO Elon Musk has won his legal battle over his $56 billion compensation package, citing shareholder approval as the basis for this claim.
This stance comes despite a judge rescinding the pay package earlier this year, as revealed in a court filing made public on Friday, reports the Guardian.
The filing follows a recent vote by Tesla shareholders to ratify the 2018 stock options package, conducted after a Delaware judge’s January ruling voided the compensation. The judge ruled that Musk improperly influenced the negotiation process and that Tesla misled shareholders about key details.
Tesla’s argument was outlined in a proposal to Chancellor Kathaleen McCormick of Delaware’s Court of Chancery, suggesting the final order should state that “judgment is entered for the defendants.” Meanwhile, the shareholders’ legal team urges the judge to adhere to her initial ruling and void Musk’s pay package. They are also seeking billions of dollars worth of Tesla stock as a legal fee award, whereas Tesla has suggested a fair fee could be as low as $13.6 million.
On Thursday, McCormick ordered the parties to begin preparing briefs to present their views on the impact of the shareholder vote on the case. She also asked them to agree on a date for oral arguments in late July or early August.
Oral arguments over the legal fee will be heard on July 8, and McCormick may take several weeks to issue a ruling. Even if she does not reverse her January decision, she might consider the shareholder vote as an indication of the value placed on Musk’s compensation package, potentially undermining the plaintiffs’ attorney-fee request.
"Tesla misled shareholders about key details." You mean like: "Your TSLA values will 10x and it will only cost you 1x? So you'll clear 9x on your investment"? We should all be so lucky to be so misled AND have a CEO who is strictly paid for performance only. The judge isn't looking out for our interests, she has her own agenda.
"the shareholders’ legal team urges the judge to adhere to her initial ruling and void Musk’s pay package" You notice the apostrophe coming after the "s" not before it? That is because there is only one shareholder here, one nine share shareholder who most likely got picked by the ambulance chasing law firm that is now asking for $6B for winning the case. This is all so ridiculous, the judge should be sanctioned and disbarred and disrobed.
I buy into a company, vote for a pay package that I see is insane but if attained will mean massive growth of my investment and the judge rescinds my vote along with the other 73% who voted for it, because we aren't capable of deciding what is a good deal for ourselves. This is beyond crazy!