Elon Musk is in $Tesla (TSLA.US)$ The record compensation package was once again rejected by a Delaware judge, despite shareholders' support for reinstating it.

Although shareholders voted at the company's annual general meeting on June 13, Delaware Court of Equity Judge Kathaleen St. J. McCormick decided to stick to her initial conclusion in January that when the company's board adopted the compensation plan in 2018, it was too influenced by the billionaire entrepreneur.

Its stock options plan was initially worth $2.6 billion and soared to $56 billion when a judge cancelled it. At Monday's closing price, the plan is worth $1.1.5 billion.

McCormick's ruling to cancel the highest US corporate executive salary arrangement in history could cause major losses to Musk's wealth. But even without these salaries, he is still the richest man in the world. Tesla shares fell 1.4% in after-hours trading.

Thanks to Tesla's rising stock price after the US election and a new round of financing from Musk's artificial intelligence (AI) startup, his net worth recently hit a record high, surpassing the previous record of $3,40.4 billion set in November 2021.

appellate

Under Delaware law, Musk now has 30 days to decide whether to appeal McCormick's ruling. Unlike the US Supreme Court, the state's Supreme Court hears all appeals against lower court decisions.

Tesla said the verdict was wrong and will file an appeal. The company posted on the X platform: “If not overturned, this ruling means that the Delaware corporation is managed by the judge and the plaintiff's attorney, and not their proper owners — shareholders.”

McCormick determined that Tesla directors paid Musk too much because they were bound by conflicts of interest. He previously stated that he needed more Tesla shares to maintain control over the electric car maker and expand further into the AI field.

“Undoubtedly, the board could have decided to pay Musk a range of healthy amounts,” McCormick wrote in the 101-page ruling. “Instead, the board gave in to Musk.”

edit/lambor