Greg Varallo, a lawyer for the plaintiff, a Tesla shareholder, said his team was considering next steps and was proud to have participated in “calling to account the Tesla board and its largest stockholder for their breaches of fiduciary duty”.
Thanks to his stake in Tesla, which has a market value of $US1.5 trillion, as well as a number of other ventures, Musk is the world’s richest person, according to the Bloomberg Billionaires Index.
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Tesla moved its corporate domicile to Texas from Delaware in 2024, after polling users on Musk’s social media platform, X. His rocket company, SpaceX, and X are also now incorporated in Texas.
Although Delaware has long been a popular destination for incorporations because of its court system, in which judges specialise in corporate law, some companies see states like Texas and Florida as more sympathetic to their interests.
For Musk to obtain the 2018 award, Tesla had to achieve financial and operational goals that were considered demanding at the time. He met those milestones, which included increasing the company’s market value to $US650 billion. The package became a model for other CEOs, and added fuel to the debate over whether corporate chieftains are overpaid.
The judge who struck down the 2018 package wrote in her opinion that the stock Musk already held “provided him tens of billions of dollars for his efforts”.
Last month, Tesla shareholders endorsed the approach of the 2018 package, approving a new pay plan for Musk that could be worth almost $1 trillion if the company meets a new series of ambitious goals under his leadership.
To compensate for reinstating Musk’s 2018 pay plan, the court on Friday offered the plaintiff who challenged it a new award: US$1.
This article originally appeared in The New York Times.
