No money: court again rejects Elon Musk's $56bn payout for Tesla's successes

The series of high-profile lawsuits around Tesla's compensation for Elon Musk continues.

Recall, in 2018, Tesla shareholders approved a $56bn compensation package that would have been the largest in US history for the head of a public company. This payout was tied to achieving a market value of $650bn for the company.

However, in January 2024, Judge Kathaleen McCormick overturned the investors' decision, deeming the approval process "deeply flawed". The judge said Musk and Tesla's board failed to prove that shareholders were "fully informed" about the payout.

Here's What We Know

Tesla held a second shareholder vote in June 2024 to re-approve Musk's compensation package, but during the most recent December meeting, a Delaware court once again blocked the payout. Moreover, Judge Caitlin McCormick ruled that Tesla must pay the lawyers who filed the lawsuit $345 million.

The CEO and founder of Tesla does not hide his outrage and on his page in X said that "the decisions of companies should be managed by investors, not judges" and Tesla will appeal this decision. It should be noted that after Trump's victory in the US elections, Tesla's share price rose by 42% in less than a month, so Musk's compensation may be $101bn rather than $56bn.

Source: Reuters