The $55.8 billion compensation wanted by Elon Musk, although approved by Tesla shareholders, again rejected by the courts

Justice once again blocks Elon Musk's mega-remuneration at Tesla. A judge in Delaware, in the eastern United States, again rejected, Monday, December 2, a huge compensation plan of 55.8 billion dollars (around 53.1 billion euros) awarded by the automobile manufacturer to his boss, although this amount was approved by a majority of shareholders.

The car manufacturer condemned this court decision in the evening and announced on X that it would appeal it.

“Shareholders should control corporate votes, not judges”for his part, reacted multi-billionaire Elon Musk.

Judge Kathaleen McCormick had already rejected this envelope in January, denouncing its allocation by a committee whose members were all close to the entrepreneur, the richest man in the world. She had thus acceded to the request of a Tesla shareholder, 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, with 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 future” of the case, specifying that the lawyers of the shareholder who initiated the procedure had given their agreement.

“Tesla and Musk could have come up with a new plan”

The initial judgment “wasn't saying Musk shouldn't be paid for his work at Tesla”wrote the magistrate in the decision rendered Monday. “Tesla and Musk could have proposed a new plan that they deemed fair and accepted that the court only overturned part of it” 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”regretted the magistrate.

Asked by Agence France-Presse, Elon Musk's lawyers did not respond.

The lawyer for the individual shareholder had argued that the decision of the general meeting had not “no legal consequences” 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%.