Elon Musk's Massive Tesla Pay Package Rejected by Judge for Being Too 'Unfair'
Tesla and X CEO Elon Musk tried to give himself a new pay package back in 2018, but this has been recently struck down by a judge in Delaware over its unfairness. This means that Tesla's payment to its top executive was just too big.
Delaware Chancery Court Chancellor Kathaleen McCormick threw out the 2018 pay package that helped make Musk one of the richest people on Earth. On Tuesday, she ruled that Musk and the Tesla board "bore the burden of proving that the compensation plan was fair, and they failed to meet their burden."
According to CNN, Musk's pay package is worth $51 billion today. It includes a 303 million split-adjusted stock option. This is something that shareholders of the company thought was too excessive, leading to the lawsuit against the Elon Musk pay package.
"We are enormously grateful for the court's thorough and extraordinarily well-reasoned decision in turning back the Tesla board's absurdly outsized pay package for Musk," a statement from Greg Varallo, one of the plaintiff's attorneys in the case, read. He added that the investors in the Musk-owned company will benefit from the decision by having the "dilution from this gargantuan pay package erased."
However, lawyers for the billionaire tech mogul argued the pay package was approved by a shareholder vote. They also argued that the shareholders had seen their Tesla shares increase in value by a massive amount since it was granted.
Judge Finds Tesla Board Did Not Have Much Independence from Elon Musk
However, the judge ruled that "Musk's preexisting equity stake provided him tens of billions of dollars for his efforts," therefore proving that the billionaire would be uncompensated if the package was thrown out. She also found that the Tesla board was not acting as the check on Musk, finding that he "was calling the shots on the pay package."
READ MORE: Elon Musk Did Not Pay X Workers the Bonuses He Promised, Finds Judge
"Swept up by the rhetoric of 'all upside,' or perhaps starry-eyed by Musk's superstar appeal, the board never asked the $55.8 billion question: 'Was the plan even necessary for Tesla to retain Musk and achieve its goals?'" she wrote in her ruling.
The Associated Press noted that fans of the infamous billionaire have argued that "he shouldn't be paid like other CEOs because he isn't like other CEOs. He and Tesla are practically inseparable, so keeping him as CEO is key to the company's growth."
Tesla CEO Elon Musk Says Workers Must Sleep on the Assembly Lines To Make Affordable Electric Vehicles
Aside from his enormous pay package, Elon Musk also recently raised eyebrows by claiming that to produce affordable electric vehicles for the masses, workers will have to sleep at the company's Texas manufacturing plant to cut costs, according to Futurism's The Byte.
"That will be a challenging production ramp," Musk said, addressing the demands for cheaper EVs. "We'll be sleeping on the line, practically. Not practically, we will be."
READ MORE: Elon Musk's SpaceX Sued by US DOJ -- Here's Why
This article is owned by Latin Post.
Written by: Rick Martin
WATCH: Judge voids Elon Musk's $56 billion Tesla pay package - TODAY
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