Elon Musk’s $55bn pay package from Tesla has been voided by a Delaware judge, who ruled that the unprecedented compensation was improperly approved by the automaker’s board of directors and had short-changed Tesla shareholders.
The ruling, in a case brought by Tesla shareholders, ordered Musk to return the granted shares in a manoeuvre called rescission, sending Tesla shares down 3 per cent in after-hours trading and dealing a blow to Musk’s finances as he seeks billions of dollars of investment for a new artificial intelligence company.
Chancellor Kathaleen McCormick said Musk, who holds a 22 per cent stake in Tesla, still controlled the board through his personality and influence, and that the board could not satisfy a standard of demonstrating both a fair price and fair process for the share grant.
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