Tesla CEO Elon Musk’s record-breaking pay package, worth around $101 billion based on the company’s closing share price Monday, was rejected by a Delaware court despite being approved by Tesla shareholders at a June meeting. The 303 million stock options were previously thrown out in January but were re-approved by 84% of shares not held by Musk or his brother.
A judge ruled that Musk and the board failed to prove the compensation plan was fair, arguing that they bore the burden of proving its fairness. Despite re-approval, the court said the package wasn’t in shareholders’ best interests. The judge criticized the board for “capitulating” to Musk’s terms without demonstrating their fairness.
Musk makes his money through stock options, but this ruling means he won’t receive a record-breaking payday based on his work at Tesla. The judge noted that while Musk is entitled to some form of compensation, the ultimate award wasn’t fair to shareholders.
The rejection comes as Musk has recently been involved in politics, donating millions to Donald Trump’s 2024 presidential campaign and joining him on the trail. He will lead a new department focused on slashing federal budgets and axing government regulations.
Source: https://edition.cnn.com/2024/12/02/investing/elon-musk-pay-package-rejected/index.html