Tesla CEO Elon Musk loses bid to get $56 billion pay package reinstated

Published Mon, Dec 2 20244:56 PM EST on CNBC.com

Despite the June 13 shareholder vote at the company’s annual meeting, Delaware Chancery Court Judge Kathaleen St. J. McCormick decided to stick with her original finding in January that the company’s board was too much under the influence of the billionaire entrepreneur when it adopted the plan in 2018. The package was initially worth $2.6 billion and spiked to $56 billion by the time the judge canceled it.

(Bloomberg Law)

If the original 2018 pay package gets ratified tomorrow. Does this resolve yes?

AIUI vote has little effect. It may allow Elon/Tesla to go back to court with some reason to try to reopen judgement/appeal. Not sure what the court will do if the company seems to have reaffirmed that yes they do want to agree that package.

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That Tesla value went down on announcement of judgement should give the judge pause for thought. Is that judgement helping tesla shareholders? No it is making them worse off by distracting Elon from what he should be doing for Tesla towards sorting out his pay package.

Alternatively, above might not cross judge's mind or have little effect. Judge may think that the vote was more or less do Tesla Shareholders want to make their CEO extremely miffed (toned down version) about pay package such that the affirmation vote means nothing and judge can and should just tell Tesla to try again and go and think about a more suitable package.

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If musk gets only 75% of the $56 B or less then I think you could perhaps argue the case was merited and worth the effort of bringing.

If he eventually gets 95%-99.9% of it then I think I would conclude the case was not really merited but Musk settled just to bring legalities to an end. Use of legal process as a pain in the neck that you really shouldn't get away with.

Between those amounts then the merit is somewhat less clear to judge.

So I would have thought that this question should perhaps have set the threshold at somewhere more like 75% to 95% of the $56 B. However other might have different views.

ex ante the pay package was only a couple billion. It was mostly out of the money call options. Then TSLA stock went to the moon, obviously.