A US court has given a setback to the legendary industrialist Elon Musk by rejecting his demand for a $55 billion salary package from his company Tesla. It is worth noting that the court has rejected such a huge salary package of Elon Musk earlier as well. Delaware Court Chancellor Kathleen McCormick said in her decision that despite the company’s shareholder vote, she will not change her January decision. The judge said that Musk’s salary package is too high and it is not right for the stakeholders.
Judge McCormick said in the decision that ‘there are flaws in the documents that Tesla has presented to the company’s stakeholders to get the salary package. Also, the company’s lawyers have shown a lot of creativity in their arguments, but their principles are against the established laws. In such a situation, the proposal for amendment has been rejected.’ Elon Musk expressed disappointment over this decision of the court and said that he will appeal against this decision. Musk wrote in a social media post that ‘the company should be controlled by the votes of shareholders (stakeholders) and not by judges.
The court ordered to pay $340 million as attorney fees, which is much less than the $5.6 billion demanded by Tesla shareholder Richard Tornetta. Let us tell you that Richard Tornetta had appealed in the court against Musk’s huge salary package. In his appeal, Tornetta claimed that Musk decided his own salary package by influencing the directors of the company. In the regulatory filing, 72 percent of the company’s shareholders supported Elon Musk’s huge salary package. Many critics are calling Musk’s salary too high. Earlier in January, the Delaware court canceled Musk’s $55 billion salary package.
In its January decision, the court said that Musk and his company Tesla failed to prove that such a huge salary was justified. After receiving disappointment from the court in January, Tesla had said that it would take the issue to shareholders.
It is worth noting that the Delaware Court of Chancery has been a pillar of American capitalism for more than a century and about two-thirds of the US Fortune 500 companies are registered under its jurisdiction.
