9:40 am, December 4, 2024
Elon Musk’s blockbuster £44bn ($56bn) pay package from Tesla has once again been blocked by a US judge.
The world’s richest man had been seeking to pocket the amount, which dates back to 2018, but has been thwarted by Delaware judge Kathaleen McCormick for a second time.
The judge initially blocked the eye-watering payment back in January after she said that Musk had been a ‘controlling shareholder’ with a potential conflict of interest during the negotiations.
The ruling found that Musk effectively controlled the Tesla board when it first agreed the package and that the payment should therefore be subject to further scrutiny.
The deal was therefore put to Tesla’s shareholders in June, when it was given the green light by a majority of 75%.
However, McCormick has now ruled that a document which Tesla gave to shareholders ahead of that vote included ‘misstatements’ and that the carmaker could not prove that the pay award was fair.
She added that Tesla could not just ‘hit reset’ in a bid to get around her initial ruling and once again blocked the payment, which would have been the largest ever paid out to the head of a listed company.
In response to the decision, Musk wrote on X: ‘Shareholders should control company votes, not judges.’
Shareholders should control company votes, not judges https://t.co/zRsWGjC2hG
— Elon Musk (@elonmusk) December 3, 2024
Meanwhile, Tesla said the decision was ‘wrong’ and announced its intention to appeal.
A spokesman said: ‘This ruling, if not overturned, means that judges and plaintiffs’ lawyers run Delaware companies rather than their rightful owners – the shareholders.’
