According to CCTV News, on December 2nd local time, Judge Katherine St. John McCormick of the Delaware District Court decided to uphold her ruling from January this year, stating that Tesla's (TSLA, stock price: $357.09; total market value: $1.146 trillion) board of directors was too influenced by Musk when approving his compensation plan in 2018, and once again rejected the plan.
It is reported that the initial valuation of the stock option plan was $2.6 billion, which had risen to $56 billion (approximately RMB 408.1 billion) by the time the judge cancelled it in January this year.
McCormick's ruling overturned the highest ever compensation plan for American corporate executives, and if the appeal fails, it could significantly reduce Musk's wealth and have an impact on the future of his company. It is reported that Musk can appeal the decision to the Delaware Supreme Court.
According to foreign media reports, McCormick wrote in his opinion on Monday: "Even if shareholder voting can produce approval effect, it cannot be done here
In addition to revoking Musk's high compensation plan, McCormick also responded to the opinion on Monday, approving Tesla to pay $345 million (approximately RMB 2.5 billion) in legal fees to lawyers representing Tesla shareholders who successfully sued to cancel Musk's compensation package.
This lawyer's fee is also considered one of the highest records in the history of US commercial litigation, and Musk and Tesla have always held a hostile attitude towards this fee and refused to pay it.
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The plaintiff's lawyer stated in a statement, "We are satisfied with McCormick's ruling, which rejected Tesla's request to continue injecting uncertainty into the court proceedings, and thank the judge and his staff for their extraordinary efforts in overseeing this complex case
In March of this year, Musk cited a tweet on the X platform and commented that lawyers who have accomplished nothing other than destroying Tesla are demanding $6 billion in compensation, which is a crime.
After McCormick's decision to cancel the plan in January, Musk criticized the court on X, saying "never register your company in Delaware. Subsequently, the company held a shareholder vote and decided to re register in Texas, officially relocating its registered address to the state in June.
Regarding Musk's motion that Tesla's approval vote on his compensation plan should prompt her to overturn her previous opinion, McCormick wrote, "If the court condones the practice of allowing the losing party to create new facts to modify the judgment, then the lawsuit will become endless
In June of this year, Tesla shareholders voted at the annual meeting to approve the compensation agreement and give Musk the promised high compensation. However, McCormick stated that Tesla's board of directors has no authority to restore Musk's compensation package through a re vote.
She also emphasized that if the court condones the losing party to fabricate new facts in order to modify the judgment, the lawsuit will become endless. Tesla should not view shareholder voting as a panacea and provide an excuse for restoring Musk's salary.
However, despite facing setbacks, Musk's personal net worth has significantly increased in recent weeks. Besides all the options in the compensation plan, Musk's net worth has increased by over $43 billion since Donald Trump won the election last month. Tesla's stock price surged 42% in the four weeks after the election, and people are optimistic that Musk's close relationship with the incoming president will benefit his company's policies.
According to Monday's closing price, Musk still holds Tesla stocks worth nearly $150 billion. Only this portion (excluding his stake in SpaceX) is enough to make him one of the wealthiest people in the world.
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Daily Economic News Comprehensive CCTV News, Caixin News Agency, Public Information