Chancellor McCormick ruled that stockholder votes cannot ratify a conflicted-controller transaction, emphasizing Elon Musk's excessive control and board influence in invalidating his $56 billion pay package.
Musk and Tesla executives are contesting court decisions that blocked his multi-billion dollar pay package, citing misrepresentations and seeking to overturn previous rulings from 2019.
Judge McCormick's December ruling reflected on Tesla's governance issues and emphasized that shareholder votes are ineffective in situations where board conflict exists, impacting Musk's compensation.
Following a shareholder lawsuit that began in 2018, Musk's controversial pay package has faced significant legal hurdles due to alleged disclosure failures and board conflicts.
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