US Court Rules Tesla Board Improperly Set Elon Musk’s $56 Billion Package
Wage and Stock Purchase Package Worth $56 Billion
Court: “The Board of Directors Unfairly Set Wages”
Board of Directors Including Younger Brother Determined Wages
The salary of Elon Musk, CEO of Tesla, is expected to be cut. The court accepted a lawsuit by Tesla shareholders claiming his salary was excessive.
According to Bloomberg, on the 30th (local time), the Delaware Court in the United States ruled, “We invalidate Musk’s salary package amounting to $47 billion.”
Judge Katherine McCormick stated in the ruling that the Tesla board of directors improperly set Musk’s salary package. For that reason, they invalidate Musk’s salary package until there is an agreement between the parties to the lawsuit.
Richard Tornetta, a shareholder of Tesla, filed this lawsuit initially. He filed a lawsuit claiming that the compensation, including Musk’s salary and stock options, was excessive. At the time of the lawsuit, Tornetta was known to have only nine Tesla shares.
Major strong opposition to the stock options is that of Musk. Tornetta, who filed the lawsuit, previously argued, “Granting Musk the right (option) to acquire more than $59 billion in Tesla shares when the stock price rises is problematic.”
He also raised issues with the Tesla board of directors. It was reported that the company’s board of directors, which set Musk’s salary, included not only Musk’s cronies but even his younger brother, Kimbal Musk.
The court also agreed with this, ruling, “The Tesla board unfairly set Musk’s salary,” and supported Tornetta, who filed the lawsuit.
Musk argued in court that “My tremendous influence on the electric vehicle industry justifies a high salary.”