ALBAWABA - A Delaware judge reaffirmed her previous ruling that Elon Musk's staggering 2018 compensation package from Tesla, now worth over $100 billion, was unconstitutional, according to CNBC, despite being reapproved by Tesla shareholders earlier in June.
Chancellor Kathaleen McCormick denied Tesla's appeals of her January decision that the compensation plan, which marks the largest in US history, was illegally authorized in light of procedural mistakes and conflicts of interest.
McCormick criticized the compensation plan, saying it was a contract negotiated by Musk who “controlled Tesla” with the help of a board that was compliant. Tesla shareholders overwhelmingly reapproved the deal in June after her original decision, which prompted Musk's legal team to request a review.
McCormick dismissed the new arguments, stating that legal precedent does not allow post-trial evidence, such as the shareholder vote, to overturn prior rulings. “Were the court to condone the practice of allowing defeated parties to create new facts for the purpose of revising judgments, lawsuits would become interminable,” she commented, CNBC reports.
“The large and talented group of defense firms got creative with the ratification argument, but their unprecedented theories go against multiple strains of settled law,” the judge added, as reported by The Hill.
In response, Tesla said that it will appeal the ruling. “A Delaware judge just overruled a supermajority of Tesla shareholders who voted to pay Elon Musk what he's worth,” the company said in response to the verdict on X, the social media platform Musk owns.
“The court’s decision is wrong, and we’re going to appeal,” the carmaker statement added.
