The court blocked Tesla's proposed $56 billion package to Elon Musk

Kathmandu. A judge in the American state of Delaware has directed that the “deal'' of salary benefits of 55 billion 500 million dollars, which is supposed to be given to Elon Musk by Tesla in 2018, be canceled. This decision was made after five years in a lawsuit filed by shareholder Richard Tornetta, who said that the salary benefits deal that was supposed to be given to Musk was too high.

On Tuesday, Judge Kathleen McCormick threw out Tesla's board of directors' approval of the payment package to Musk as flawed. In 2018, Tesla's board of directors approved a proposal to pay Musk within a specified period based on the company's stock performance.

The shareholder's lawyers argued in a Delaware court that Musk influenced his salary package. They also claimed that the company directors who determine Musk's salary package are not independent and have a deep relationship with Musk. For this, they were of the opinion that he had approved a large package according to his own wish in terms of the package. However, Musk's lawyers denied the allegations.

The court ruled that Musk cannot receive more than $55 billion in salary from the company and that it is not in the company's interest. In this case, Musk said that the Delaware company is not a suitable place to form a corporation Post kept

After the court decision was not in his interest, Musk took another Post He suggested that Nevada or Texas would be suitable for the formation of the corporation. Delaware courts are known for their business-friendly policies and well-organized legal structures.

The deal was made that Musk, the chief executive officer (CEO) of the electric vehicle manufacturer Tesla, will receive 303 million shares of Tesla as a package. According to CNN, the stock is currently worth $51 billion. This was the biggest deal in US corporate history. Due to this, Musk became the richest person in the world.

Musk asked Tesla's board earlier this month to come up with a new pay package. Under this, he requested to increase his share in the company from 13 percent to 25 percent.

In his ruling, Judge McCormick said Tesla should have rescinded the option. However, the company has not yet been given a formal order to do so. After the judge's decision, Tesla shares fell by two percent on Wednesday. According to Forbes, on Thursday Musk's wealth is 182.6 billion dollars. With this, he has fallen to the second place in the list of the world's richest people.

In November 2022, Tesla's directors argued that Musk is the most dynamic entrepreneur in the world and that under his leadership, the company will be profitable, and that they provided stock equal to that amount.

In addition to being Tesla's top executive, Musk is also a major shareholder. He is also the owner of many other companies besides Tesla. Currently, he is the owner of rocket company SpaceX, social network X, AI company XAI, brain chip firm Neuraling and other companies.

Last updated: Jan 18, 2080 13:45


The above article/images/excerpt related to are either copyright property of or respective owners.

Rabins Sharma Lamichhane

Rabins Sharma Lamichhane is senior ICT professional who talks about #it, #cloud, #servers, #software, and #innovation. Rabins is also the first initiator of Digital Nepal. Facebook: rabinsxp Instagram: rabinsxp

Leave a Reply

Your email address will not be published. Required fields are marked *