Tesla (TSLA) fell modestly Tuesday night as a judge voided CEO Elon Musk’s $56 billion stock compensation plan.
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A Delaware judge voided Elon Musk’s $56 billion compensation plan, siding with plaintiffs who argue that Tesla’s board acted improperly in setting the pay deal.
“Musk launched a self-driving process, recalibrating the speed and direction along the way as he saw fit,” Delaware Chancery Court Chief Judge Kathaleen McCormick wrote in her ruling. “The process arrived at an unfair price. And through this litigation, the plaintiff requests a recall.”
On the one hand, voiding the unprecedented 2018 compensation plan reduces potential dilution for shareholders. So arguably the news could be viewed as a positive for TSLA stock.
But the Tesla board, not known for much independence, could offer a new compensation plan for Musk in short order.
Meanwhile, Musk recently called for a big jump in voting power to 25%, above and beyond the now-voided compensation plan. He threatened to move AI and robotics tech from Tesla to another company if he doesn’t get that added control.
Following the verdict, Musk posted on X, “Never incorporate your company in the state of Delaware.”
Judge McCormick oversaw the Musk vs. Twitter case, which ended with the billionaire acquiring the social site for $44 billion.
Tesla Stock
Tesla stock fell 2.55% in extended action.
In Tuesday’s trade, shares rose 0.35% to 191.59. TSLA stock hit an eight-month low of 182.63 on Jan. 25 following disappointing Tesla earnings and guidance.
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Jessica Roberts is a seasoned business writer who deciphers the intricacies of the corporate world. With a focus on finance and entrepreneurship, she provides readers with valuable insights into market trends, startup innovations, and economic developments.
