Elon Musk loses bid to reinstate massive Tesla pay plan, now worth $101B

[LiberalArkie]

DEC 2, 2024 5:58PM

A Delaware judge today rejected Elon Musk's bid to reinstate a Tesla pay package that was worth over $50 billion at the beginning of 2024 and has now crossed $100 billion based on Tesla's latest share price. The judge also ordered Tesla to pay $345 million in attorneys' fees to the plaintiff's counsel, who had sought $5.6 billion in fees.

Delaware Court of Chancery Judge Kathaleen McCormick, who voided the pay plan in January, said today that a June 2024 shareholder vote re-approving the 2018 pay plan is not a compelling reason to reverse the original ruling. Her ruling said that a "large and talented group of defense firms got creative with the ratification argument, but their unprecedented theories go against multiple strains of settled law."

Musk is thus prevented from accessing a pay package whose potential value has soared along with Tesla's stock price. "As of Monday, the pay package was worth $101.4 billion, according to Equilar, a compensation consulting firm," Reuters wrote.

By holding another shareholder vote, Musk and Tesla board members essentially created new evidence after the trial, McCormick wrote:

There are at least four fatal flaws. First, the defendants have no procedural ground for flipping the outcome of an adverse post-trial decision based on evidence they created after trial. Second, common-law ratification is an affirmative defense that must be timely raised, which means that, at a minimum, it cannot be raised for the first time after the post-trial opinion. Third, what the defendants call "common law ratification" has no basis in the common law—a stockholder vote standing alone cannot ratify a conflicted-controller transaction. Fourth, even if a stockholder vote could have a ratifying effect, it could not do so here due to multiple, material misstatements in the proxy statement. Each of these defects standing alone defeats the motion to revise.

Snip

https://arstechnica.com/tech-policy/2024/12/judge-again-rejects-the-elon-musk-tesla-pay-plan-now-valued-at-101-billion/

[ProfessorGAC]

1. A Compensation Package That...

...started at nearly 70% of assets, and us now at almost 100% is preposterous.
I suppose this outcome was inevitable because of the stock price being so much higher than supported by financial fundamentals.

[LiberalArkie]

2. I wonder when the banks and stock people are going to find out they have been played for fools?