American Judge Rules Against Elon Musk’s $56 Billion Compensation from Tesla

An American judge invalidated a previous decision by Tesla’s board of directors to grant CEO Elon Musk a compensation package worth $56 billion.

The judge ruled in favor of a shareholder who filed a lawsuit claiming that the billionaire was paid more than he deserved.

Kathleen McCormick, the judge in the Delaware Chancery Court, stated that the shareholder, Richard Tornetta, had the right to challenge the excessive compensation awarded to Musk in 2018.

She called on all parties involved to consult and submit a joint statement outlining the issues that need to be addressed to reach an agreement in the trial. Tesla’s stock price dropped more than 3% after the ruling, which spanned around 200 pages, was published.

Shortly after the ruling was announced, Musk, the world’s richest man, warned his followers on Twitter not to establish companies in Delaware. Musk’s lawyer did not immediately respond to a request for comment.

Judge McCormick described Musk’s compensation plan for 2018 as “the largest potential compensation opportunity ever recorded in the public markets.”

Musk was sued alongside Tesla and other members of the board of directors.

Greg Farrell, representing the shareholders, said in a statement, “We are extremely grateful for the comprehensive, exceptional, and logical decision by the court to rescind the massive and arbitrary executive pay package awarded to Musk by Tesla’s board of directors.”

He added that the court’s hard work would directly benefit Tesla investors.