A judge in Delaware, in the eastern United States, again rejected on Monday a huge $55.8 billion compensation plan awarded by Tesla to its boss, Elon Musk, although this amount had been approved by a majority of the automobile manufacturer’s shareholders.
Judge Kathaleen McCormick had already rejected this envelope in January, denouncing its allocation by a committee whose members were all close to Elon Musk.
She had thus acceded to the request of a shareholder of the company, who had taken legal action to have this remuneration invalidated.
Despite this first cancellation, the board of directors chose to submit this plan a second time to the general meeting, the shareholders adopting it by 72%. It had already been validated for the first time during the 2018 AGM.
After this vote in June, Tesla proposed “a meeting between the parties to discuss a proposal for the continuation” of the case, specifying that the lawyers of the shareholder at the origin of the procedure had given their agreement.
The initial judgment “did not say that Musk should not be paid for his work at Tesla,” the magistrate wrote in the decision rendered Monday.
“Tesla and Musk could have proposed a new plan that they deemed fair and accepted that the court would only cancel part” of the amount initially awarded, continued Judge McCormick.
“Instead, they tried to get the same plan approved by relying on vague theories about Delaware law,” lamented the magistrate.
Asked by AFP, Elon Musk’s lawyers did not respond.
The lawyer for the individual shareholder had argued that the decision of the general meeting had “no legal consequence” on the procedure decided by Judge McCormick.
The judge also decided on Monday to award $345 million in compensation to this lawyer, Gregory Varallo, at Tesla’s expense.
In electronic trading after the close on Wall Street, Tesla shares fell a little more than 1%.
