November 04, 2024 – The fate of Tesla CEO Elon Musk’s $56 billion compensation package will be decided by the end of this year. Kathaleen McCormick, Chancellor of the Delaware Court of Chancery, indicated on Thursday that she would make a final ruling by the end of 2024.
In January of this year, McCormick had described Musk’s remuneration package as “astonishing” and deemed it unfair to Tesla shareholders.
Tesla shareholders had approved the compensation plan several years ago, but following the January ruling, they were asked to vote again. Despite the earlier ruling, shareholders once again voted in favor of awarding Musk the $56 billion package.
Now, it is up to McCormick to determine the final outcome. She will decide whether the payment should be made to Musk and will also consider a demand from shareholder lawyers suing Musk, seeking $1 billion in legal fees, payable in cash or stock.
Although Tesla shareholders have twice voted overwhelmingly in support of Musk’s pay package, the final approval rests with McCormick.
Tesla’s board chair, Robyn Denholm, has cautioned that if the compensation plan is not approved, Musk may shift his focus to other projects. However, given Musk’s multiple ventures, he might explore other opportunities even with shareholder support. Nevertheless, with Tesla’s upcoming ventures like driverless taxi services, Musk’s departure from the company seems unlikely.
