Elon Musk at the UK AI Summit in 2023. Image: Rory Arnold/No 10 Downing Street via Flickr (CC BY-NC-ND 2.0)
The planned pay package had been thrown out by the same judge back in January.
A pay package for Elon Musk worth $56bn has been rejected once again by a US judge in relation to a lawsuit involving the billionaire’s electric vehicle company Tesla.
The lawsuit involving the world’s richest man had been previously thrown out in January by the same judge, Delaware Chancery Court Chancellor Kathaleen McCormick.
At the time, McCormick ruled in favour of the main shareholder in the suit who challenged the package. The judge found that Musk and the Tesla board failed to prove that the compensation plan was fair.
In June, Tesla board chair Robyn Denholm urged the company’s shareholders to approve Musk’s pay package, claiming that otherwise the entrepreneur may leave the car-manufacturing giant.
The latest pay package is now worth around $101bn based on Tesla’s closing share price on Monday, according to CNN, and is made up of 303m Tesla stock options. The news site also reported that the initial deal from 2018 helped to make Musk one of the richest people in the world.
The judge maintained while Musk’s proposed package was once again ratified by a majority of shareholders, that didn’t mean that the package was in the interest of Tesla’s shareholders.
She wrote that while the defence firms “got creative” with the ratification argument, she nevertheless maintained that “unprecedented theories go against multiple strains of settled law”.
The conclusion at the end of the legal document reads as follows: “Defendants’ motion to revise is denied. Plaintiff’s counsel is awarded fees in the amount of $345m which Tesla may elect to pay in freely tradeable Tesla common stock.”
A busy legal year for Elon Musk
Musk, who is also the owner of X and was recently appointed to US president-elect Donald Trump’s Department of Government Efficiency (DOGE), has been embroiled in a number of legal battles this year.
Last month, tech giant Microsoft was named as a defendant in Musk’s amended lawsuit against OpenAI. He previously dropped the lawsuit in June for undisclosed reasons.
Musk was one of the original founders of OpenAI, which was established as a non-profit organisation in 2015, but he left the company in 2018 following disagreements about its direction.
In October, the production company behind the science fiction film Blade Runner 2049 film filed a lawsuit against Elon Musk, Tesla and Warner Bros Discovery for alleged copyright infringement using artificial intelligence (AI).
Alcon Entertainment claimed that the defendants requested permission to use “an iconic still image” from the movie to promote Tesla’s new autonomous ‘Cybercab’ at a livestreamed event, but permission was not granted. The company alleges that the defendant then “used an apparently AI-generated faked image to do it all anyway”.
And in September, it was reported that X appeared to cave in to the demands of Brazil’s Supreme Court, despite weeks of protest from both the company and Musk.
The social media site was previously banned in the country after failing to name a legal representative in the country or take down certain X accounts. However, in a court filing seen by The New York Times, X said that it is complying with the Supreme Court’s demands.
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Elon Musk at the UK AI Summit in 2023. Image: Rory Arnold/No 10 Downing Street via Flickr (CC BY-NC-ND 2.0)
