A judge on Tues ruled that #ElonMusk's $56 billion #Tesla pay package could be tossed, calling the compensation "an unfathomable sum" that was not fair to #shareholders, acc/to a court filing.
The ruling swept away the largest pay package in #corporate America. The judge found it was
negotiated by directors who seemed #beholden to their headline-making CEO & the promise of allowing him to share in the company's enormous growth.
@Nonilex
If you put the same brutal and ruthless metrics on his performance as is put on hourly workers could you justify that amount of money. Could you make the argument that he alone added over 50 billion in value to the company?
"Swept up by the rhetoric of 'all upside,' or perhaps starry eyed by #Musk’s superstar appeal, the board never asked the $55.8 billion question: Was the plan even necessary for Tesla to retain Musk & achieve its goals?" wrote Kathaleen McCormick of Delaware's Court of Chancery.
"Never incorporate your company in the state of Delaware," Musk said in a social media post.
(🤣 that’s where basically all companies are incorporated!)
The plaintiff's #legal team…argued the board had a duty to offer a smaller pay package or look for another CEO & that they should have required #Musk to work full-time at #Tesla instead of allowing him to focus on side projects, like #SpaceX & #X.
The package grants stock option awards allowing Musk to buy Tesla stock at heavily discounted prices as escalating financial & operational goals are met.
…The ruling will put the spotlight on Tesla's next round of compensation negotiations w/ the CEO.
Judge orders #Tesla to undo PayPackage that helped make #Musk world’s richest person
The ruling by a Delaware court stems from a Tesla shareholder lawsuit over the tech #billionaire’s 2018 compensation package
A Delaware judge on Tues ruled that #ElonMusk’s generous 2018 compensation package, which helped make the #tech entrepreneur the world’s richest person, was unfair & should be undone.
The $56 billion package, advanced by shareholders & #Tesla’s board, entitled #Musk to #stock options in the company as it hit specific performance targets. #Shareholders sued Musk, alleging the process that led to the package was improper.
In a news release, the plaintiff’s attys summed up their case:
“During a full trial on the merits, #Tesla#shareholders alleged that they had proved that a number of the plan’s key milestones that #Musk & the board described in their disclosures as very difficult to achieve were, in fact, expected based on Tesla’s confidential projections shared w/ banks & rating agencies; that the proxy wrongly characterized the compensation cmte & the board as ‘independent’ when they were not;
“& that the proxy misrepresented the genesis of the plan, the specifics having originated w/Musk himself rather than the compensation cmte of the board.”
Add comment