A judge in a court in the eastern US state of Delaware ruled in favor of a shareholder in the automaker Tesla who had requested the cancellation of an estimated $56 billion compensation plan awarded to boss Elon Musk in 2018.
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“The verdict is in favor of the plaintiff,” says the 200-page decision published on Tuesday. The parties must now “discuss among themselves in order to reach a final decision to implement this judgment” and “conclude this case.” at experimental level.
The billionaire posted on the social network
As a result of the ruling, Tesla shares lost 2.42% in electronic trading after the New York Stock Exchange closed.
Hearings were held in November 2022 where Elon Musk defended this enormous compensation plan.
“The probability of survival (of the group) was extremely low,” recalled the serial entrepreneur, which ensured that the manufacturer was on the verge of bankruptcy in 2018.
Elon Musk, along with Tesla and certain board members, were sued by a shareholder who accused them of improperly approving “the largest compensation plan ever granted to an executive” in 2018.
This plan involved granting Mr. Musk Tesla shares based on the achievement of several goals over a ten-year period. When passed, the amount was estimated at $56 billion.
According to the complainant Richard Tornetta, the businessman dictated his terms to the directors who, because of their relationships with him or their personal interests, were not independent enough to oppose them.
This was despite the fact that he did not work full-time for Tesla, as he was also at the helm of the space company SpaceX and the startups Neuralink and The Boring Company. He also bought the social network Twitter, which he renamed X.
The trial took place without a jury.
Elon Musk had asserted that he had no role in drafting the plan, although documents presented in court suggested he had discussed it with board members and executives.