Tornetta v. Musk, et al.
Tornetta v. Musk, et al. is a case involving an objection to a pay for performance contract that Tesla, Inc. shareholders had approved in exchange for Elon Musk agreeing to waive a salary. The case was presided over by Delaware Chancellor Judge Kathaleen McCormick. It was submitted on April 25, 2023, and a ruling was issued in favor of the plaintiff on January 30, 2024.[1] In June 2024, Tesla stockholders voted for the pay package a second time.[2] Judge McCormick ruled against the pay package a second time on December 3, 2024.[3] Writing for Bloomberg Law on December 5, 2024, legal expert Anat Alon-Beck said the case was "a landmark in corporate governance."[4]
NPR reported, "The compensation package was set up as a series of 12 milestones, each unlocking more compensation as Tesla continued to grow. Under the plan, Musk wouldn't earn a salary, but would instead receive additional Tesla shares the more the company grew."[5]
Even though the $56 billion pay package had been approved by shareholders, Judge McCormick cited the amount as being "incredible" and "an unfathomable sum" when she made her first ruling in January 2024.[6] By the time Judge McCormick made her second ruling in December 2024, the pay package had increased to $101 billion based on Tesla’s closing share price.[7]
On December 2, 2024, Musk tweeted, "Shareholders should control company votes, not judges."[8][9]
References
[edit]- ^ RICHARD J. TORNETTA, Individually and on Behalf of All Others Similarly Situated and Derivatively on Behalf of Nominal Defendant TESLA, INC., Plaintiff, v. ELON MUSK, ROBYN M. DENHOLM, ANTONIO J. GRACIAS, JAMES MURDOCH, LINDA JOHNSON RICE, BRAD W. BUSS, and IRA EHRENPREIS, Defendants, and TESLA, INC., a Delaware Corporation, Nominal Defendant., courts.delaware.gov, January 30, 2024
- ^ Judge rejects Elon Musk’s $56 billion pay package, despite shareholder vote, Washington Post, December 3, 2024
- ^ A judge has once again rejected Musk’s multi-billion-dollar Tesla pay package. Now what?, Associated Press, December 3, 2024
- ^ Musk Compensation Case Will Stand as Corporate Governance Pillar, Bloomberg Law, December 5, 2024
- ^ Elon Musk's more than $50 billion pay deal at Tesla was rejected again. Here is why, NPR, December 3, 2024
- ^ Judge voids Elon Musk's 'unfathomable' $56 billion Tesla pay package, Reuters, January 31, 2024
- ^ Elon Musk’s massive, multibillion-dollar Tesla pay package was blocked by a judge again, CNN, December 2, 2024
- ^ Why a judge rejected Elon Musk's $50 billion Tesla pay package, ABC News, December 3, 2024
- ^ Tweet by Elon Musk, Twitter, December 2, 2024
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