Tesla has officially filed its appeal against the Delaware judge’s decision on Elon Musk’s compensation package.
It’s heading to the state’s Supreme Court.
For a full context of the case, you can read our last article on Judge McCormick rejecting Tesla’s claim that the new shareholder would ratify the compensation package and force her to vacate her decision to void the pay package.
Last month, Judge McCormick rejected Tesla’s ratification argument, which she explained goes against settled law, and she also found other “multiple, material misstatements in the proxy statement” of the new vote.
Tesla and its CEO Elon Musk were upset at the ruling and the latter went as far as calling up “corruption” without offering any evidence.
As expected, Tesla has now appealed the ruling with the Delaware Supreme Court.
The automaker is insisting on trying to get the same $55 billion compensation package approved based on the argument that the judge is taking away shareholders’ right to decide for themselves.
However, this is based on Tesla completely rejecting all the judge’s findings regarding how Tesla is misleading shareholders about how the package was negotiated and presented to shareholders.
Electrek’s Take
As I wrote last summer, Elon Musk’s compensation package case will haunt Tesla for years. Even if you believe Musk deserves this package, Tesla’s approach to reinstating it was boneheaded and didn’t follow the law as I, and seemingly the judge and most Delaware corporate law experts, understand it.
Tesla, and more specifically Elon Musk, it’s hard to differentiate the two lately, which is part of the problem, are showing no intention to address their governance issues.
Let’s be clear: Elon could get paid somewhat easily here. Even as much or close to this amount. However, it needs to do it through the proper governance and respect the process.
Instead, Elon prefers to lie to shareholders and present the situation as politically motivated lawfare. It’s nonsense.
Now, it’s going to the Supreme Court and there’s a chance that nothing will change.
There’s an easy solution. Recognize the issues highlighted by the judge, address them, and present an updated compensation package to shareholders that takes into account the governance issue and that reduces the package proportionally to the cost of this entire mess to Tesla.