A US district judge has once again rejected Elon Musk’s $56 billion pay package, ruling that it was improperly influenced by the Tesla CEO. The decision, made by Delaware Chancery Court Judge Kathaleen St. J. McCormick marks the second time the judge has struck down Musk’s record-setting compensation, which was originally awarded by Tesla’s board in 2018.
Judge McCormick stated that Musk exerted undue influence over the Tesla board in securing the lucrative pay package, which she argued was not in line with healthy corporate governance. “There were undoubtedly a range of healthy amounts that the board could have decided to pay Musk. Instead, the board capitulated to Musk’s terms,” she wrote in her 101-page decision.
Despite shareholder support for the pay package, the judge maintained her position from January, rejecting the extravagant compensation plan for a second time. This ruling could potentially strip Musk of billions of dollars from his net worth, although his position as the world’s richest person remains unaffected due to Tesla’s soaring stock value.
The controversial pay package, initially worth $2.6 billion, ballooned to $56 billion and reached an estimated value of $101.5 billion by the time the judge annulled it. Despite the setback, Musk continues to benefit from a strong stock rally, bolstered by investor confidence in Tesla and his close relationship with political figures, including US President-elect Donald Trump.
