Elon Musk has again been prevented from becoming even richer by a US court which blocked his $56bn (£44bn) pay package despite company shareholders approving the sum.
Shareholders of the world’s most valuable carmaker Tesla, had approved the package in June, which if paid would have been the biggest ever for the head of a listed company, Delaware judge Kathaleen McCormick said.
In scrutinising the vote Ms McCormick judged Mr Musk controlled the pay negotiations and Tesla made misstatements in its document given to shareholders ahead of the vote.
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The company could not say the approval vote was a “cure-all” to justify Mr Musk’s pay, she said. The pay dated back to 2018 but Tesla had not proved it was fair, the judge said.
The shareholder vote came after Ms McCormick first struck down Mr Musk’s compensation in January, ruling he was a controlling shareholder with a potential conflict of interest and so the pay package must be subject to a more rigorous standard.
Tesla could not hit “reset” to approve the pay, Ms McCormick added.
The decision has been rejected by the company and by Mr Musk who posted on X: “Shareholders should control company votes, not judges.”
Similarly, Tesla said the decision was “wrong” and it is going to appeal, a process that could take another year.
“This ruling, if not overturned, means that judges and plaintiffs’ lawyers run Delaware companies rather than their rightful owners – the shareholders,” it added.
The court case took place in Delaware as that’s where the company is incorporated.
It’s bad news for Mr Musk after months of positives for his companies and personal influence.
Tesla share values soared after the election of president-elect Trump given Mr Musk’s proximity to Mr Trump during the campaign. He’s since been appointed to run a new US ministry, the Department of Government Efficiency, or DOGE for short.
Ironically share values fell following the court announcement, bringing down Mr Musk’s net worth as a chunk of his fortune is made up of Tesla stock.