A Delaware judge has once again ruled that Elon Musk’s huge 2018 pay package from Tesla—worth $56 billion—should be canceled. This pay deal helped Musk become the world’s richest person.
Judge Kathaleen St. J. McCormick of the Delaware Court of Chancery reaffirmed her earlier decision from January. She said Tesla’s board was too influenced by Musk when they approved the massive payment, which was given as stock options. Tesla’s attempt to prove the pay plan was fair didn’t succeed.
In June, Tesla shareholders voted to support the 2018 pay package. However, McCormick said this vote was an attempt to change the outcome of her earlier ruling by creating new evidence after the trial. She called the legal arguments defending the pay deal “creative” but said they went against well-established legal principles.
After the ruling, Musk posted online, calling the decision “Absolute corruption” and accusing McCormick of being “an activist posing as a judge.”
Tesla faced this case in Delaware because it was incorporated there until Musk moved its incorporation to Texas earlier this year. Following the January ruling, Musk advised businesses not to incorporate in Delaware.
The legal battle began in 2022 when a Tesla shareholder sued, claiming Musk’s pay package was too large and wasn’t tied to him focusing on Tesla. At that time, Musk was busy with his purchase of Twitter (now renamed X).
More recently, Musk has been working closely with President-elect Donald Trump. They even spent Thanksgiving together at Trump’s Mar-a-Lago estate. Trump has also asked Musk to co-lead a new government office focused on reducing spending and bureaucracy.