Elon Musk Lost more than $56 billion After the decision of the US court this Tuesday The exorbitant salary given to him by Tesla’s board of directors in 2018 is excessive.
Delaware Judge Kathaleen McCormick agreed with plaintiff Richard Tornetta in the case that Musk controlled Tesla’s board of directors when she granted him a package of stock options at the car company in 2018.
After McCormick’s decision, Musk reacted on the social network. At the same time, Tesla shares lost 3% of their value after the markets closed.
The stock option package is conditional on Tesla reaching 12 targets, including a market value of at least $50 billion and certain revenue targets. He allowed Musk to become the richest man in the world. According to the agreement reached by Musk and Tesla, The businessman was able to purchase 1% of the manufacturer’s shares at an affordable price Every time the company achieves one of the set goals.
During the hearing in 2022, Tesla investor Tornetta claimed that the compensation agreed between Musk and the company was exorbitant and This only happened because the businessman controlled the board of directors. Musk, on the other hand, stated that he had no role in the agreement in which Tesla compensated him for tens of millions of shares in the company.
In his decision published this Tuesday, McCormick stated that Musk did indeed argue that: deep personal relationships Together with the people who have to decide on the amount of compensation. For example, the judge noted that Tesla’s legal department manager, Todd Maron, who participated in the process, was the attorney representing her in the divorce case. What’s more, the negotiation delivered everything Musk demanded, even though the judge felt the businessman wouldn’t have left Tesla if he hadn’t received the massive stock options package. McCormick therefore said that Musk directed the process and an “unfair price” was reached, which is why the agreement between the company and the businessman was ruled invalid.
Musk now controls 13% of Tesla shares and is the company’s largest individual shareholder. But last Thursday, Musk announced in a conference call with analysts that he believes he needs to own 25% of Tesla to lead the manufacturer, and that the board should give him more stock options to reach that figure.