Tesla chief Elon Musk has condemned a judge’s decision to revoke his $56 billion pay package for a second time, despite it being approved by shareholders and directors.
The payout, which came in the form of Tesla stock options, made Musk the richest man in the world. The package is now worth around $100 billion, following a major rally in Tesla’s stock prices in recent weeks.
Judge Kathaleen McCormick upheld her January decision, ruling that Tesla’s board members were overly influenced by Musk and that shareholders were not properly informed about the CEO’s compensation package.
McCormick stood by her decision even after lawyers for Musk and Tesla argued that a June shareholder vote in which 75% of shareholders agreed to give Musk the payout cleared the way for the payout.
She said Tesla lawyers cannot overturn a decision using “evidence they create after the trial.”
Musk said angrily about X after the judge’s ruling: “Shareholders should control the votes of companies, not the judges.”
Tesla added in a statement: “A Delaware judge just dismissed a supermajority of Tesla-owning shareholders who voted twice to pay Elon Musk what he’s worth. The court’s decision is wrong and we will appeal.
“If this ruling is not overturned, it will mean that judges and plaintiffs’ attorneys will be running Delaware corporations instead of their rightful owners – the shareholders.”
Tesla chief Elon Musk (pictured) has slammed a judge’s decision to revoke his $56 billion pay package for the second time
Judge Kathaleen McCormick (pictured) upheld her January decision
McCormick said her ruling that the June vote was incorrect because Tesla’s board presented “materially misleading” information to shareholders and told them they should not have told them that another vote would change the outcome of the case.
McCormick also ordered Tesla to pay $345 million in fees to the lawyers representing the shareholders who brought the case, far less than the $5.6 billion the lawyers had asked for.
Still, lawyers from the firm Bernstein Litowitz Berger & Grossmann said in a statement: “We hope that the Chancellor’s well-reasoned decision will bring an end to this case for Tesla shareholders.”
The lawyers added that they would be happy to defend the verdict if Tesla were to appeal it to the Delaware Supreme Court.
Last month, Tesla shares soared after rumors that Donald Trump would adopt a federal framework for self-driving cars spread like wildfire.
Bloomberg first reported the news that members of the Trump transition team have told advisers they plan to make autonomous vehicles one of the Transportation Department’s priorities.
The Trump team is also reportedly looking for policymakers to come up with a way to regulate self-driving vehicles.
During an earnings call last month, Musk said he believes automated electric vehicles are the future.
Elon Musk just scored a big win for Tesla as it’s been reported that Donald Trump’s advisors want the Department of Transportation to adopt rules for self-driving cars
“Non-autonomous gasoline vehicles in the future will be like riding a horse and using a flip phone,” he said.
This comes after Musk fully embraced Trump, donating tens of millions to his campaign, speaking enthusiastically at his rallies and now leading a proposed government agency that aims to cut trillions from federal spending.
Musk, who owns nearly 13 percent of Tesla’s outstanding shares, will certainly benefit from the new administration’s new stance on self-driving.
Musk became $15 billion richer immediately after Trump’s historic election victory as Tesla’s shares rose, making him worth more than $300 billion, according to the Bloomberg Billionaires Index.
Tesla shares have risen nearly 30 percent since Trump defeated Vice President Kamala Harris.
As it stands, the federal government has created 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 foot pedals, but come with the ability to turn on autopilot, which allows the car to steer within the lanes in front of you.
Most newer Teslas come with full self-driving capability, which is more autonomous than autopilot. In this mode, the car can automatically merge onto highways, change lanes and park.
However, the system has not yet been perfected and several serious accidents have been reported.