"Elon Musk's 2018 pay package from Tesla, once worth $56bn, has been restored by the Delaware Supreme Court, in the United States, two years after a lower court struck down the compensation deal as unfathomable. Friday's ruling overturns a decision that had prompted a furious backlash from Musk and damaged Delaware's business-friendly reputation. The pay package was by far the largest ever, until Tesla shareholders approved a new, even larger pay plan of nearly $1 trillion in November."
"The 2018 pay deal provided Musk options to acquire about 304 million Tesla shares at a deeply discounted price if the company hit various milestones, which it did. Tesla estimated in 2018 that the plan was potentially worth $56bn, although given the rise in the stock price, the value ballooned to about $120bn by early November. The options represent approximately 9 percent of Tesla's outstanding stock."
"In 2024, after a five-day trial, Delaware Judge Kathaleen McCormick concluded that Tesla's directors were conflicted and key facts were hidden from shareholders when they voted to approve the plan. She ordered that the 2018 plan be rescinded. Musk accused Delaware judges of being activists, hostile to tech founders, and he urged businesses to follow Tesla and reincorporate elsewhere. Dropbox, Roblox, The Trade Desk and Coinbase were among the handful of large companies that moved their legal homes to Nevada or Texas."
Delaware Supreme Court restored Elon Musk's 2018 Tesla compensation package, reversing a lower court's 2024 rescission. The 2018 plan granted options to acquire about 304 million Tesla shares at a deeply discounted price contingent on performance milestones that were achieved. Tesla estimated the plan at $56bn in 2018 and the value rose to about $120bn by early November, representing roughly 9% of outstanding stock. A shareholder lawsuit by Richard Tornetta led Judge Kathaleen McCormick to find conflicted directors and hidden facts after a five-day trial. Musk criticized Delaware judges and some companies moved incorporations, though Delaware remains the dominant legal home for US public firms.
Read at www.aljazeera.com
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