Elon Musk Judge once again rejects 56 billion dollar compensation package for Tesla CEO
In June, Tesla shareholders once again approved a share package worth billions of dollars for Musk. But a judge still sees things differently.
03.12.2024, 05:40
03.12.2024, 05:59
dpa
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- Despite the support of Tesla shareholders, a court continues to oppose an agreed remuneration package worth billions for CEO Elon Musk.
- On Monday (local time), a judge in the US state of Delaware stood by her decision in January that the CEO had too much influence in the background when the plan for share awards in 2018 was agreed.
- Originally, the compensation plan had a total value of 2.6 billion dollars, but this had risen to 56 billion dollars by the time of the first decision due to the sharp rise in Tesla's share price.
- Based on Monday's closing price, the value would even be more than 100 billion dollars.
Despite the support of Tesla shareholders, a court continues to oppose the agreed remuneration for CEO Elon Musk in the billions of dollars. On Monday (local time), a judge in the US state of Delaware upheld the decision she made in January that the CEO had too much influence in the background when agreeing the plan for share awards in 2018.
Originally, the compensation plan had a total value of 2.6 billion dollars, but this had risen to 56 billion dollars by the time of the first decision due to the sharp rise in Tesla's share price. Based on Monday's closing price, the value would even be more than 100 billion dollars.
Shareholders left in the dark
The judge came to the conclusion earlier this year that Musk had close relationships with members of the Tesla Board of Directors, with whom he had negotiated the generous remuneration. However, the shareholders had been kept in the dark about the entanglements before the first vote. As a result, they had not had the opportunity to make a well-considered decision, the judge had justified her ruling at the time. She therefore ruled in favor of the plaintiff, who wants to cancel the agreement with Musk.
In June, Tesla shareholders had actually agreed to the giant share package again, but this did not automatically mean that Musk would be vindicated in court. Tesla can still take legal action against the current decision. However, even without the compensation package, Musk would remain the world's richest person.
Tesla shares benefit from Musk's closeness to Trump
Tesla shares fell by a good two percent to around 349 dollars in after-hours US trading on Monday. At the beginning of the year, when the judge made her first decision, the shares had cost less than 200 dollars.
Tesla shares had recently benefited from Musk's closeness to US President-elect Donald Trump. Among other things, investors are betting on the creation of a government framework for fully self-driving vehicles, which could then also benefit Tesla's Robotaxi. In the wake of the share price gains, Tesla's market capitalization rose again to more than 1.1 trillion dollars.