Court Chaos: “Tesla’s $56B Mega-Payday Goes Up in Smoke!

A Delaware judge has nullified Elon Musk’s $56 billion compensation package from Tesla, the electric car company he owns, as per court documents.


Chancellor Kathaleen St. Jude McCormick’s surprising verdict on Tuesday asserted that Tesla’s board of directors failed to justify the compensation plan, despite its direct link to Musk’s performance as CEO. Musk, deeply involved in formulating the plan, had personal connections with the negotiators, influencing the judge’s decision.

“The concept of fairness calls for a holistic analysis that takes into consideration two basic issues: process and price,” the judge wrote. “The process leading to the approval of Musk’s compensation plan was deeply flawed. Musk had extensive ties with the persons tasked with negotiating on Tesla’s behalf.”


The judge highlighted decades-long personal and professional relationships, citing an example of a former divorce attorney moved to tears by his admiration for Musk. She also argued that Tesla shareholders voting for the package were uninformed due to inaccuracies and omissions in the proxy statement.

“The price was no better,” she added, emphasizing that the compensation plan was 30 times larger than Musk’s previous pay package.


Musk criticized the ruling on X (formerly Twitter), advising against incorporating in Delaware and recommending Nevada or Texas for shareholder decision-making.

Delaware, historically business-friendly, has shifted toward far-left policies that may deter profit. Musk shared an op-ed noting that Delaware’s embrace of environmental, social, and governance (ESG) principles might jeopardize its corporate appeal.


Entrepreneur Vivek Ramaswamy considers the decision a threat to capitalism, asserting that courts should not second-guess boards’ business judgments.


This legal battle is part of a series Musk faces post his Twitter acquisition, removing federal influence from the platform.

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