US Judge reaffirms decision to void Elon Musk’s compensation package

A Delaware judge has reiterated her decision to void Tesla CEO Elon Musk’s compensation package, despite approval from the company’s shareholders during its annual meeting.

Chancellor Kathaleen McCormick of the Delaware Court of Chancery reaffirmed the ruling, initially made in January, citing the $56 billion pay package as “unconscionable” and “unfairly determined by the company’s board.”

The ruling paves the way for the cancellation of Musk’s compensation plan, which was valued at $56 billion earlier this year. Following a significant surge in Tesla’s stock after the U.S. presidential election, the package’s value has now exceeded $100 billion.

In response to the decision, Musk took to X, formerly known as Twitter, warning others to “never incorporate your company in Delaware.” Shortly after, he announced plans to relocate Tesla’s headquarters to Texas.

In June, Tesla shareholders voted in favor of Musk’s voided pay package and the proposal to move the company’s operations to Texas. While the shareholder vote does not override the court’s decision, analysts noted that it could bolster Musk’s case for a reconsideration of the ruling.

The case continues to draw attention as it highlights corporate governance issues and the broader implications of high-profile executive compensation disputes.