Tesla (TSLA+0.50%) CEO Elon Musk on Wednesday officially filed an appeal with Delaware’s Supreme Court after a state judge rejected his $56 billion compensation package for the second time.
The widely expected move came a little less than a month after Delaware Chancellor Kathaleen McCormick opened the 30-day window for Tesla to appeal her ruling to the state’s highest court. Shortly after McCormick shot down Tesla’s bid to restore Musk’s package, the electric vehicle company confirmed its plans to appeal.
“This ruling, if not overturned, means that judges and plaintiffs’ lawyers run Delaware companies rather than their rightful owners – the shareholders,” Tesla said last month. Musk also slammed McCormick as an “activist posing as a judge” and agreed with a post calling the ruling “literal corrupt bulls—t.”
Shareholders first voted to approve Musk’s pay package in 2018. It gave him the ability to buy up to 304 million Tesla shares at a pre-set price of $23.34 as long as he met a series of performance goals, which he did. Tesla stock currently trades at $393 per share.
McCormick first rejected the deal last January. The vast majority of Tesla shareholders reapproved the deal in June, adding weight to Tesla’s attempt to change the judge’s mind.
But McCormick ruled that Tesla’s “unprecedented theories go against multiple strains of settled law,” citing a series of flaws that cemented her decision. She also awarded the attorneys for the shareholder who sued Musk $345 million in fees, well below the more than $5 billion they requested but more than Tesla wanted.
Tesla lobbied hard to convince shareholders to ratify Musk’s compensation package, often pointing out that he technically hasn’t been paid for his work as CEO in about six years. Musk has said that he would prefer to own a quarter of the company’s shares before making Tesla a “leader” in robotics and artificial intelligence.”
He currently owns about 13% of Tesla’s stock.
The initial rejection of his pay deal bumped Musk out of the top spot on Forbes’ ranking of the wealthiest people. But by the end of the year, the growing value of Tesla, SpaceX, and xAI sent his net worth above $400 billion for the first time. He’s currently worth about $416 billion, according to Forbes.
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