A Delaware judge reaffirmed her earlier decision to block Tesla’s multibillion-dollar compensation package for Elon Musk, despite shareholder approval in June. Judge Kathaleen McCormick ruled Monday that the agreement, now valued at over $100 billion, was unfairly negotiated and dismissed arguments from Musk’s lawyers to reverse her January decision.
In her opinion, McCormick stated, “The large and talented group of defense firms got creative… but their unprecedented theories go against multiple strains of settled law.” She emphasized that shareholder votes cannot retroactively ratify conflicted-controller transactions or create new grounds for overturning her decision.
Tesla criticized the ruling, vowing to appeal. The company stated on Musk’s platform X: “A Delaware judge just overruled a supermajority of shareholders… This ruling, if not overturned, means judges and plaintiffs’ lawyers run Delaware companies rather than… shareholders.” Musk called the decision “lawfare” and insisted that shareholders should dictate company decisions.
The compensation agreement, tied to Tesla’s stock performance, has grown substantially in value due to a nearly 45% increase in the company’s share price since Election Day.
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