FILE – Tesla CEO Elon Musk leaves the Tesla Gigafactory for electric cars after a visit in Gruenheide near Berlin, Germany, March 13, 2024. If Tesla shareholders vote against restoring Elon Musk’s $44.9 billion pay package that was tossed out by a Delaware judge, the CEO could deliver on threats to take artificial intelligence research to another firm, or even leave Tesla. whether or not to restore CEO Elon Musk’s massive pay package that was thrown out by a Delaware judge.
“Anytime you tell people you’re winning, you’re encouraging others to join you and those who oppose you to pull back,” said Charles Elson, a retired professor and founder of the corporate governance center at the University of Delaware. The move is designed to escape from the Delaware court’s oversight and possibly from McCormick’s ruling. In a January opinion on a shareholder lawsuit, the judge determined that Musk controlled the Tesla board and is not entitled to the landmark pay package.
Tesla Chairwoman Robyn Denholm, in a letter to shareholders, wrote that the package was approved by 73% of the vote six years ago. “Because the Delaware Court second-guessed your decision, Elon has not been paid for any of his work for Tesla for the past six years that has helped to generate significant growth and stockholder value.
Anticipating a quick move by Tesla, lawyers for the shareholder who filed the lawsuit seeking to block Musk’s pay deal, Richard Tornetta, filed motions in Delaware last month seeking an order stopping Tesla from trying to move the case. Tesla responded in letters to the judge that there is no cause for such concerns because they won’t seek a move. Besides, Tesla would still be a Delaware corporation at the time of this week’s shareholder vote, they wrote.