Judge overturns Musk’s $56 billion compensation plan

A judge in a court in the state of Delaware in the eastern United States has ruled in favor of a shareholder of automobile manufacturer Tesla who requested the cancellation of a compensation plan awarded to its boss, Elon Musk, in 2018, estimated at $56 billion. . “Judgment is in favor of the plaintiff”

The 200-page decision, published on Tuesday, January 30, concludes that the parties have now “Discuss among themselves to establish a final decision with a view to carrying out this judgment” And “To end the matter at the trial level”. The trial was held without a jury.

The billionaire posted on the social network X (formerly Twitter), which he owns: “Never locate your company headquarters in the state of Delaware.. Following the ruling, Tesla shares fell 2.42% in electronic trading after the New York Stock Exchange closed.

Part time boss

A hearing took place in November 2022, during which Elon Musk defended the massive compensation plan. “The possibility of existence (of a group) was extremely low., then recalled the multi-entrepreneur, and confirmed that the manufacturer was very close to bankruptcy in 2018. Elon Musk, along with Tesla and certain members of the board of directors, was sued by a shareholder who alleged improper authorization in 2018. “The largest compensation scheme ever given to a manager”.

The plan involves giving Elon Musk shares in Tesla based on the achievement of several goals over ten years. It was estimated at $56 billion when it was adopted. According to the prosecutor, Richard Tornetta, the businessman gave his terms to directors who were not independent enough to oppose him, given their relationship with him or their personal interests. And this, despite the fact that he did not work full time for Tesla, because he was also the head of the space company SpaceX and the startups Neuralink and The Boring Company. He also bought the social network Twitter, which he named X.

Elon Musk has confirmed that he did not participate in the development of the plan, although documents shown in court indicate that he discussed it with members of the board of directors and executives.