By A Delaware judge has invalidated Tesla Inc. Chief Executive Elon Musk’s massive $56 billion compensation package, deeming the process used to arrive at that staggering figure “deeply flawed”. Delaware Chancery Court Chancellor Kathaleen McCormick wrote that Musk had extensive connections with the individuals responsible for negotiating on behalf of Tesla, and that the working group behind the package included people who were indebted to Musk.
The judge also described the compensation package, which was granted about five years ago and was contingent on Tesla meeting various milestones, as “historically unprecedented”. As a result of Tuesday’s ruling, the company will now have to create a new compensation package for Musk.
Tesla, which dissolved its media relations team in 2020, did not provide any comment in response to a request for input.
Following the news of the ruling, Tesla’s stock (TSLA) experienced a decline of over 2% during the extended trading session, in contrast to the 0.4% gains seen during regular trading hours. This month alone, Tesla’s stock has witnessed a decline of nearly 23%, although it has still managed to record a 15% increase over the past 12 months. In comparison, the S&P 500 index has advanced approximately 22% during the same period.
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