The Delaware courts will decide whether the pay plan can be reinstated. The case is likely to continue for months and may spawn additional lawsuits. Musk's compensation, which is based on Tesla's performance, was estimated to be worth around $55 billion when it was voided, making it the largest pay package ever awarded to a CEO. Tesla claimed it hit all 12 performance targets as of 2023.
Key takeaways:
- Elon Musk celebrated a victory as Tesla shareholders approved a proposal to reinstate his pay package, which was initially approved in 2018 but struck down by a Delaware judge in January 2022.
- Despite the approval, Tesla must take the issue back to court to get Musk's pay package reinstated, as the company is still subject to Delaware law.
- Tesla also passed a proposal to move its state of incorporation from Delaware to Texas, but this won't allow the company to sidestep the Delaware ruling on Musk's pay.
- The case is likely to spawn additional lawsuits and could take months to resolve, with the possibility of an appeal to the Delaware Supreme Court.