Despite Shareholder Vote Approval... US Court Rejects Musk's $77 Trillion Compensation Package

Musk to Decide on Appeal Within 30 Days

Elon Musk, CEO of Tesla, who had overwhelming support from Tesla shareholders, had his '77 trillion won compensation package' rejected by a U.S. court. This upheld the January ruling that judged the Tesla board's approval process of the compensation package was conducted under pressure from CEO Musk.

On the 2nd (local time), CNBC reported that the Delaware court in the U.S. dismissed the stock option compensation plan worth $56 billion (approximately 77 trillion won) that the Tesla board approved to pay CEO Musk in 2018.

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Earlier, CEO Musk had held a shareholder vote to ratify the compensation package at Tesla's annual shareholders meeting held in Austin, Texas, last June, receiving overwhelming support. There were expectations that Musk could gain an advantage in this lawsuit, but the court did not accept this.

Judge Catherine McCormick, who handled the case, stated, "Even if a shareholder vote can have a ratification effect, it cannot in this case," and ordered Tesla to pay $345 million (approximately 485.2 billion won) in attorney fees to the legal team representing Tesla minority shareholder Richard Tornetta, who filed the lawsuit to invalidate the compensation package.

The plaintiff's legal team said in a statement, "We are satisfied with Judge McCormick's ruling rejecting Tesla's proposal to inject ongoing uncertainty into the court proceedings," and added, "We hope that the judge's reasonable decision will bring a swift end to the issues faced by Tesla shareholders." CEO Musk must decide whether to appeal to the Delaware Supreme Court within 30 days.

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Bloomberg News explained, "The value of the compensation package, which soared to $56 billion last January, reached $101.5 billion (approximately 143 trillion won) based on Tesla's closing price on this day," adding, "If the highest-ever executive pay package in a U.S. company is invalidated, it could significantly erode Musk's wealth, but even without receiving the pay, he will maintain his title as the world's richest person." On this day, Tesla's stock closed at $357.09, up 3.46% from the previous session on the New York Stock Exchange.

Earlier, when Judge McCormick invalidated his compensation package in January, CEO Musk reacted on X (formerly Twitter), saying, "You should never incorporate a company in Delaware." Subsequently, in February, Musk moved the corporate domicile of his space company SpaceX from Delaware to Texas, and the legal address of Tesla's headquarters, previously located in Delaware, was also relocated to Texas.

This content was produced with the assistance of AI translation services.