The judge who revoked Musk’s pay package is confident Tesla will not challenge the ruling outside Delaware

Delaware Judge Chancellor Kathaleen McCormick has noted that she is confident Tesla will not use the upcoming 2024 annual shareholder meeting as a way to attack its decision to revoke the 2018 CEO pay package. This is despite TSLA shareholder Richard Tornetta’s legal team claiming that Tesla and Musk could try to circumvent McCormick’s ruling in another jurisdiction.

Last month, the legal team of TSLA shareholder Richard Tornetta – who owned nine shares of the EV maker when he filed his complaint against Musk’s compensation plan – asked McCormick to prevent their case from being overturned in Texas court , as noted in a Reuters report. Tornetta’s legal team shared their concerns in a lawsuit last month.

Tesla, in turn, noted that the claims made by Tornetta’s legal team were “major speculation.” The company’s legal team also noted that Delaware would retain jurisdiction over the dispute surrounding Musk’s 2018 compensation plan. These comments appear to have been taken by McCormick as an assurance that Tesla would not intend to circumvent its ruling.

“If I have misinterpreted the defendants’ position, the defense – as officers of the court – is obliged to correct this. In the meantime, the defendants’ statements give me great comfort,” the Delaware judge wrote in a letter.

Among the proposals that could be voted on at the 2024 annual meeting of shareholders is the ratification of Elon Musk’s 2018 compensation plan, as well as the reincorporation of Tesla from Delaware to Texas. Tesla has urged shareholders to vote on the issue, as evidenced by the launch of a dedicated website on the issue, as well as perks such as a tour of Giga Texas.

Taking into account Tesla’s stock splits over the years, Elon Musk’s 2018 pay package was signed at a time when Tesla was trading for less than $20 per share. So even though TSLA shares are down significantly from their $1 trillion-plus peak, the company is still worth several times what it was valued at when Musk’s 2018 compensation package was approved. It should be noted that all of Musk’s targets for his 2018 pay package have been successfully achieved.

Don’t hesitate to contact us with news tips. Just send a message to [email protected] to let us know.

Back To Top