(New York) Elon Musk, currently the richest man in the world, obtained from the Supreme Court of the State of Delaware the annulment of a first instance decision having revoked his multi-year compensation plan estimated at $56 billion, validated for the first time in 2018 by Tesla shareholders.
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According to a fifty-page decision dated and made public on Friday, the judges of the Supreme Court of this eastern US state ruled in favor of Elon Musk and “overturned the cancellation” of this plan.
On January 31, 2024, Judge Kathaleen McCormick ruled in favor of Richard Tornetta, a shareholder of the automobile manufacturer who criticized Elon Musk, Tesla and certain members of the board of directors for having unduly authorized “the largest compensation plan ever awarded to an executive”.
This plan included giving Mr. Musk Tesla shares based on the achievement of several objectives over ten years. It was estimated at $56 billion when it was adopted.
The judge considered that the shareholders had received “erroneous” and “misleading” information about the board of directors and the remuneration committee – several members of which had been close to the billionaire for 15 to 20 years – ahead of the 2018 general meeting, during which the plan was approved.
Following this decision, not hiding his dissatisfaction, the multi-billionaire submitted to the June 2024 General Assembly a resolution to transfer Tesla’s headquarters from Delaware to Texas – where several of his companies were already based – and another to obtain new validation of this plan. Both resolutions were approved.
New twist in December 2024: the Delaware courts canceled the plan a second time and Elon Musk ultimately turned to the supreme jurisdiction of this state.
Tesla granted him in August, in the form of an amendment to this plan, 96 million shares, for a value of approximately $29 billion.
And, above all, the board of directors has concocted a new compensation plan for the coming decade, which could ultimately bring him a record $1,000 billion. It was approved by shareholders on November 6.
It is made up of twelve tranches setting financial and operational thresholds triggering, under certain conditions, the granting of group shares to the boss.
In electronic trading after the New York Stock Exchange closed, Tesla shares rose 0.37%.
