Judge says directors should not have agreed $100bn pay deal she has blocked, criticising the board’s lack of independence
Won’t somebody please think of the world’s richest man? Elon Musk was steaming after Delaware judge Kathaleen McCormick ruled against reinstating the controversial pay package – now worth more than $100 billion following Tesla’s recent rally – awarded to Musk in 2018.A quick recap: in 2018, Tesla set performance goals for Musk. He hit the targets, and Tesla’s enormous share price gains unlocked a gargantuan share option package.
In January, Judge McCormick said Tesla should not have agreed to it, criticising the board’s lack of independence from Musk. Tesla held a second ratification vote in June, but the new shareholder vote has not persuaded McCormick.Volkswagen blues: Carmaker struggles to build a business for an EV future
‘If you charge someone €400 they are immediately p*ssed off.’ Third generation of Fitzpatrick hoteliersMusk is already worth $330 billion, and his aforementioned compensation package appears obscene to many. Nevertheless, one can see why some see this as judicial overreach. Musk’s pay package has twice been approved by more than 70 per cent of Tesla shareholders.
Still, Tesla could have avoided this mess if they hadn’t shown such reckless disregard for corporate governance and packed the board with Musk cronies. Thus, the saga continues: a cautionary tale of what happens when a company worships its leader at the expense of accountability.
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