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Elon Musk's Tesla pay package is once again questioned by the judge who initially tossed it
By Katherine Tangalakis-Lippert,
3 days ago
A judge on Friday questioned the restoration of Elon Musk's multibillion-dollar pay package after Tesla lawyers argued that a recent shareholder vote re-approving the pay should be enough to reinstate it.
Marc Piasecki/Getty Images
A judge on Friday questioned the restoration of Elon Musk's multibillion-dollar Tesla pay package.
Tesla's lawyers argue a shareholder vote approving the pay should be sufficient to reinstate it.
The judge, who previously invalidated the pay package, said the issue "will not end here and now."
The Delaware judge who previously threw out Elon Musk's $55 billion Tesla pay package has cast new doubts on whether the CEO's massive benefits package should be reinstated despite approval from the company's shareholders.
Tesla lawyers on Friday argued the pay should be reinstated following a June shareholder vote approving it.
"Honoring the shoulder vote would affirm the strength of our corporate system," The Associated Press reported David Ross, an attorney for Musk, told Chancellor Kathaleen McCormick. "This was stockholder democracy working."
But McCormick wasn't immediately convinced. The judge said she'd take their arguments "under advisement" and that the issue "will not end here and now," The Wall Street Journal reported.
McCormick pointed out that there is no legal precedent that allows a post-trial vote to reverse an adjudicated decision that corporate officers had breached their fiduciary duties.
"This has never been done before," AP reported McCormick said.
In January, McCormick called the initial approval process of Musk's pay package "deeply flawed" and said Musk "had extensive ties with the persons tasked with negotiating on Tesla's behalf," which prompted her to invalidate the pay package.
The issue has been the subject of continued litigation stemming from a 2018 lawsuit filed by Tesla investor Richard Tornetta. Tornetta originally argued that Musk and the automaker failed to fulfill their fiduciary duties when Tesla awarded Musk a pay package "beyond the bounds of reasonable judgment."
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