Current:Home > MyElon Musk can't keep $55 billion Tesla pay package, Delaware judge rules -WealthMap Solutions
Elon Musk can't keep $55 billion Tesla pay package, Delaware judge rules
View
Date:2025-04-18 12:22:09
Elon Musk may not keep a Tesla pay package worth more than $55 billion, a Delaware judge ruled on Tuesday, saying that the Tesla CEO and his company failed to prove that the massive payout was fair.
The ruling comes five years after a shareholder lawsuit accused Musk and Tesla's board of directors of breaching their duties to the electric vehicle manufacturer, wasting corporate assets and unjustly enriching the billionaire.
Tesla shares slid 4% in after-hours trading.
Musk had testified in November that he didn't attend any meetings where the plan was discussed by Tesla's board or its compensation committee, and denied that he had a hand in setting the terms of the payout. But Chancery Court Judge Kathaleen McCormick wrote in her ruling that Musk and his attorneys failed to prove that the compensation plan was fair.
"[T]he defendants bore the burden of proving that the compensation plan was fair, and they failed to meet their burden," McCormick wrote in the decision, which was posted online by Bloomberg News.
She added that Musk, Tesla and their attorneys also failed to prove that the milestones that Musk had to meet to receive the pay package were difficult to reach, and said that other parts of their defense failed to make their case.
"The defendants maintained that the plan is an exceptional deal when compared to private equity compensation plans, but they did not explain why anyone would compare a public company's compensation plan with a private equity compensation plan," she added. "The defendants insisted that the plan worked in that it delivered to stockholders all that was promised, but they made no effort to prove causation."
After the judge released her ruling, Musk wrote on X, formerly known as Twitter, "Never incorporate your company in the state of Delaware."
—With reporting by the Associated Press.
- In:
- Tesla
- Elon Musk
Aimee Picchi is the associate managing editor for CBS MoneyWatch, where she covers business and personal finance. She previously worked at Bloomberg News and has written for national news outlets including USA Today and Consumer Reports.
TwitterveryGood! (9)
Related
- Gen. Mark Milley's security detail and security clearance revoked, Pentagon says
- 2 teens found fatally shot at a home in central Washington state
- Gigi Hadid arrested in Cayman Islands for possession of marijuana
- SAG actors are striking but there are still projects they can work on. Here are the rules of the strike.
- Federal court filings allege official committed perjury in lawsuit tied to Louisiana grain terminal
- Warming Trends: Extracting Data From Pictures, Paying Attention to the ‘Twilight Zone,’ and Making Climate Change Movies With Edge
- Inside Clean Energy: Which State Will Be the First to Ban Natural Gas in New Buildings?
- Scammers use AI to mimic voices of loved ones in distress
- The 401(k) millionaires club keeps growing. We'll tell you how to join.
- Silicon Valley Bank's three fatal flaws
Ranking
- Bill Belichick's salary at North Carolina: School releases football coach's contract details
- Indigenous Climate Activists Arrested After ‘Occupying’ US Department of Interior
- What is the DMZ? Map and pictures show the demilitarized zone Travis King crossed into North Korea
- South Korean court overturns impeachment of government minister ousted over deadly crowd crush
- IRS recovers $4.7 billion in back taxes and braces for cuts with Trump and GOP in power
- Bison severely injures woman in Theodore Roosevelt National Park in North Dakota
- Margot Robbie's Barbie-Inspired Look Will Make You Do a Double Take
- The Fires That Raged on This Greek Island Are Out. Now Northern Evia Faces a Long Road to Recovery
Recommendation
Buckingham Palace staff under investigation for 'bar brawl'
Very few architects are Black. This woman is pushing to change that
SAG actors are striking but there are still projects they can work on. Here are the rules of the strike.
Why the Paris Climate Agreement Might be Doomed to Fail
Jamie Foxx reps say actor was hit in face by a glass at birthday dinner, needed stitches
Habitat Protections for Florida’s Threatened Manatees Get an Overdue Update
New Florida Legislation Will Help the State Brace for Rising Sea Levels, but Doesn’t Address Its Underlying Cause
Jecca Blac’s Vegan, Gender-Free Makeup Line Is Perfect for Showing Your Pride