The richest man in the world Elon Musk will still not receive shares worth 100 billion US dollars. The judge in charge has confirmed her ruling.
The share package worth tens of billions of US dollars for Tesla boss Elon Musk has failed again in court. The responsible judge in the US state of Delaware has once again rejected the shareholders’ distribution plan that was renewed in the spring. “The large and talented group of lawyers” was creative in their arguments to justify it, she now writes, but their unprecedented theories ran counter to applicable law in several ways. There are several “fatal flaws”.
More than 100 billion US dollars for Musk
The legal dispute concerns a compensation plan for Musk that was originally worth 2.6 billion US dollars. The company boss was supposed to receive the money in the form of shares, provided that they reached certain price targets during the term and Tesla achieved specified financial figures. Due to the strong increase in the value of the shares, the total value eventually rose to 56 billion US dollars, and on Monday the shares were even worth over 100 billion US dollars together, reports Reuters .
In January, Judge Kathaleen McCormick explained that the board of directors responsible for the package had been misled on two counts. The members responsible were described as independent of Elon musk, although they were not. Rather, he had maintained close ties with them and paid them generous compensation. In addition, there had been no real negotiations about Musk’s remuneration. He was also not obliged to provide any specific services or work hours.https://youtu.be/IoxWos15dTs?si=Aq_nu15rgN92Q5JR
Clear words from the judge
After the share package was rejected at the beginning of the year, Tesla shareholders approved it again in mid-June . However, they did not convince the judge. One cannot overturn a verdict with evidence that is produced afterwards, she writes, among other things. In addition, new arguments were only put forward after the verdict – and therefore too late. And even if a new vote could enable the package to be approved, in this case “several material false statements” in the associated documents stand in the way.
If the court were to accept that losing parties create new facts after a verdict. In order to revise verdicts, court proceedings would take forever, McCormick writes . Meanwhile, she has approved that the lawyers who initiated the case will receive 345 million US dollars – they had originally demanded 6 billion US dollars. Despite the discount, this is the largest sum in such a case. Tesla and Elon Musk have rejected the verdict and immediately announced that they intend to appeal.