Judge Kathaleen McCormick of the Delaware State Court issued an order denying Tesla to pay CEO Elon Musk a compensation package worth $56 billion once again, after the court previously issued the same order earlier this year.
Prior to this, Tesla had received approval to pay Elon Musk a compensation plan from shareholders in 2018, based on performance targets over a 10-year period. However, Tesla achieved all the targets in just 6 years. The Tesla board stated that this compensation was crucial as Musk is the driving force behind the company’s success and will continue to work at Tesla. But the Delaware State Court suspended the payment citing it was excessively high and expressed concerns over Musk’s influence in the approval process.
Following the court’s denial earlier this year, Tesla held a shareholder meeting in June to seek approval for the payment once again. Shareholders voted in favor, prompting Tesla to announce they will use this approval to appeal to the court for reconsideration. However, the court has remained firm in its decision.
Tesla and Elon Musk have not yet commented on the latest court order, but this has led Tesla to relocate its headquarters registration from Delaware to Texas, where the state laws are more favorable. This move comes after Delaware claimed jurisdiction over this matter.
Source: The Guardian
TLDR: Judge denies Tesla to pay CEO Elon Musk $56 billion compensation package, prompting company to relocate headquarters registration to Texas, after shareholders approved the payment.
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