Elon Musk's record-breaking compensation package at Tesla has been overturned by a Delaware judge, despite shareholder support for its reinstatement. Although shareholders approved the plan at Tesla's annual meeting, Judge Kathaleen St. J. McCormick maintained her initial conclusion that the board was too influenced by Musk when they adopted the plan in 2018. Originally valued at $2.6 billion, the stock options soared to $56 billion when canceled and are now worth $101.5 billion based on recent closing prices. This decision could significantly impact Musk's wealth, but he remains the world's richest person. Tesla's stock (TSLA, Financial) fell 1.4% in after-hours trading.
Musk has 30 days to appeal the ruling under Delaware law. Tesla plans to appeal, arguing that the decision wrongly places control of Delaware companies in the hands of judges and plaintiffs' lawyers rather than shareholders. McCormick found Tesla's board overpaid Musk due to conflicts of interest, as he sought more shares to maintain control and expand into AI.
