A Delaware judge late Tuesday voided Tesla Inc. Chief Executive Elon Musk’s $56 billion compensation package, siding with the shareholder plaintiff and calling the process to arrive at that eye-watering number “deeply flawed.”
“Musk had extensive ties with the persons tasked with negotiating on Tesla’s behalf” and the package’s working group included people “beholden to Musk,” Delaware Chancery Court Chancellor Kathaleen McCormick wrote.
The judge also called the package, granted some five years ago and, like previous packages, contingent upon Tesla hitting several milestones, “historically unprecedented.”
Tuesday’s ruling means that the company will have to draft a new compensation package for Musk.
Tesla, which disbanded its media relations team in 2020, did not respond to a request for comment.
Shares of Tesla
TSLA,
dropped more than 2% in the extended session after gains of 0.4% in the regular session. The stock has lost nearly 23% this month, but has gained 15% in the past 12 months, which compares with an advance of about 22% for the S&P 500 index
SPX
in the same period.
This story originally appeared on Marketwatch
