Elon Musk’s huge $56 billion pay deal from Tesla in 2018, which made him the richest man in the world, should be taken away, a Delaware judge confirmed on Monday.
Judge Kathaleen St. J. McCormick of the Delaware Court of Chancery said Tesla failed to show that the payment plan for Musk was fair. She upheld her earlier decision from January, saying Tesla’s board was too influenced by Musk when they approved the large stock option payment.
Tesla shareholders approved Musk’s pay package in June, but McCormick said this was an attempt to undo her earlier ruling with evidence created after the trial. She criticized their legal arguments as going against established laws.
In response, Musk called the ruling “absolute corruption” on social media and labeled McCormick as “an activist posing as a judge.”
The case was held in Delaware because Tesla was incorporated there until earlier this year when Musk moved the incorporation to Texas. After the January ruling, Musk warned others not to register their companies in Delaware.
The issue started when a Tesla shareholder sued in 2022, claiming the payment was too big and didn’t ensure Musk’s full focus on Tesla. At that time, Musk was busy trying to buy Twitter, which he later purchased and renamed X.
Recently, Musk has been working closely with President-elect Donald Trump. The two are often seen together and even spent Thanksgiving at Trump’s Mar-a-Lago resort. Trump has also asked Musk to help lead a new “Department of Government Efficiency” to cut government spending and staff.
