Jan. 31 (UPI) — A judge in Delaware struck down Tesla’s board of directors’ $56 billion compensation package for CEO Elon Musk.
Chancery Court Chancellor Kathleen McCormick on Tuesday agreed with shareholder Richard Tornetta that Musk’s compensation was too much, calling the 2018 year deal “unfair.” She ordered that Musk must give back what he has received thus far.
“In the final analysis, Musk launched a self-driving process, recalibrating the speed and direction along the way as he saw fit,” McCormick said in her ruling, according to CNBC. “The process arrived at an unfair price. And through this litigation, the plaintiff requests a recall.”
Greg Varallo, an attorney for the plaintiffs, praised the ruling.
“We are enormously grateful for the court’s thorough and extraordinarily well-reasoned decision in turning back the Tesla board’s absurdly outsized pay package for Musk,” Varallo said in a statement. “The court’s hard work will redound directly to the benefit of Tesla investors, who will see the dilution from this gargantuan pay package erased.”
Musk still has the option of appealing McCormick’s ruling to the Delaware Supreme Court.
In a series of posts on the social media site X, which Musk owns, the wealthy tech titan threatened to move his headquarters from Delaware to Texas after the decision.
“Never incorporate your company in the state of Delaware,” Musk wrote in one post.
“I recommend incorporating in Nevada or Texas if you prefer shareholders to decide matters,” Musk said in another before asking followers in an X poll whether he should move his headquarters to the Lone Star state.
The ruling comes after a poor quarterly financial report was revealed by Tesla last week, a result of the electric car leader cutting the price tag for many of its vehicles. The result was better car sales but it did not result in a significant revenue bump.
Earlier this month, Musk went public with his desire to own 25% of Tesla stock before moving forward with his work on artificial intelligence, threatening he could grow the sector outside of the company if he didn’t have that kind of control. He currently owns 13% of the company’s stock.
