Why Elon Musk Was Denied His $100 Billion Pay ?

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Remember, in June 2024, Tesla shareholders approved new compensation plan Elon Musk's decision to leave Tesla. This choice followed an initial cancellation by the American courts. The latter should have allowed the leader to receive up to 56 billion dollars (at the current rate, it is even 100 billion dollars) .

But, as we told you then, this vote was still pending a court decision. The Delaware judge who had canceled the first plan had to render her final verdict. Her decision is now known and it is not in favor of Elon Musk.

New snub for Elon Musk

Judge Kathaleen St. J. McCormick of the Delaware Court of Chancery has therefore once again canceled this plan to remunerate the billionaire. In her January decision following a shareholder complaint, she found that “The process leading to the approval of Musk's compensation plan was deeply flawed.”

Now, she emphasizes that a “Shareholder vote alone cannot ratify a conflicted control transaction.”. She adds that a major shareholder has influence over the board and its decisions. Tesla also allegedly presented “materially misleading” information to shareholders in the statement urging them to vote for Elon Musk's compensation plan.

Criminalized, Tesla responded on X (also owned by Elon Musk): “A Delaware judge has just overturned a supermajority of shareholders who own Tesla and who voted twice to pay Elon Musk what he deserves. This decision, if not overturned, means that judges and plaintiffs' lawyers run Delaware.” The executive continued in the same tone: “Shareholders should control the votes of the company, not judges.”

According to the New York Times, Tesla's board of directors will likely try to shape a new compensation system that will this time fall under the jurisdiction of Texas and not Delaware, where the company was previously registered. The manufacturer will, however, still be at the mercy of legal challenges, according to experts consulted by our colleagues.

Keeping Elon Musk at Tesla

As a reminder, in her argument to justify Elon Musk's colossal compensation, Robyn Denholm, chairwoman of Tesla's board of directors, estimated in a letter addressed to shareholders:

What we recognized in 2018 and continue to recognize today is that one thing Elon certainly does not have is unlimited time. Nor does he face a shortage of ideas and other places where he can make an incredible difference in the world. We want those ideas, that energy, and that time to be dedicated to Tesla, for the benefit of you, our owners. But this requires mutual respect.

More information on this in our previous article here.

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